Central Bank announces decision to keep policy interest rate at 19 percent

At today’s Monetary Policy Board meeting, the central bank (CBRT) decided to keep the policy interest rate constant at 19 percent. Expectations were also that interest rates would be held steady. At the second PPK meeting, chaired by Sahap Kavcioglu, who replaced Naci Agbal, the decision was made to keep the interest fixed.

At the PPK meeting on March 18, chaired by Agbal, it had been decided to increase the interest rate from 17 percent to 19 percent, and Agbal was dismissed by the President’s decision on March 20.

At the meeting on April 15, which was the first PPK meeting attended by Kavcioglu, the decision was made to keep the interest fixed.

Market expectations for today’s meeting were also in the direction of holding interest rates steady.

Before the decision, the dollar/TL, which was at 8.31, fell to 8.28 after the CBRT did not give any signal that it would cut interest rates soon.

MESSAGE GIVEN WAS “CURRENT APPROACH WILL CONTINUE”

The message was as follows: “Demand and cost elements, supply constraints in some sectors and high levels of inflation expectations continue to pose risks to pricing behavior and the inflation outlook. The slowing effects of monetary tightening on loans and domestic demand have begun to be observed. Taking into account the high levels of inflation and inflation expectations, the current stance on monetary policy will be maintained until the significant decline in the April inflation report forecast path is achieved. Accordingly, the board decided to keep the policy interest constant.”