The Turkish Central Bank (TCMB) said that the interest rate on repurchase agreements, also known as Repos, will be maintained at 14 percent despite a jump in inflation to a two-decade high of 69.97 percent.
After meeting with Governor Shihab Kavcioglu, the Monetary Policy Committee opted to keep the interest rate unchanged, according to a statement.
The statement explained that geopolitical risks that turned into conflict, as well as the repercussions of the Covid-19 pandemic, continued to pose negative threats to global economic activity, raising uncertainty.
It added that the recent surge in inflation was influenced by rising global oil and food costs as a result of wars and conflicts, as well as supply disruptions and increasing demand.
The central bank stated that the goal of not raising the interest rate is to reduce inflation in the country, stressing that it will firmly continue to use all tools available until strong indicators emerge indicating a permanent decrease in inflation and the medium-term target of 5 percent is achieved, in line with the main goal of price stability.
The Turkish lira has seen several declines in the past few days, the most recent of which was today, reaching 16.40 against the dollar.
In December 2021, TCMB cut the interest rate on Repos from 15 to 14 percent for a week and kept it at that level ever since, amid an unprecedented economic crisis in the country.Â
