Türkiye’s Central Bank (TCMB) has decided to keep its key interest rates unchanged at 50 percent for the second consecutive month. This indicates that the bank believes the current monetary policy is tight enough, even before inflation reaches its expected peak of around 75 percent.
Economists polled by Reuters had widely anticipated that Türkiye’s central interest rates would remain at 50 percent.
TCMB officials are projecting that inflation in Türkiye, which is still among the highest globally, will start declining from next month and end the year at 38 percent.
Türkiye’s central interest rate has risen significantly by 4,150 basis points (41.5 percent) since June 2023. However, the bank kept it unchanged at 50 percent last April to allow its earlier monetary policy tightening measures, which included a 500 basis point increase in March, to take effect.
Read more: Türkiye’s inflation climbs to 68.5 percent as rate hikes fail to stem price rise
TCMB revises 2024 inflation forecast upwards
In its latest quarterly inflation report, Türkiye’s Central Bank has revised its inflation forecast for the end of 2024 upwards, from a previous estimate of 36 percent to 38 percent. However, the bank has kept its inflation projections for 2025 and 2026 unchanged at 14 percent and 9 percent respectively.
The country’s annual inflation rate has quickened, rising from 68.5 percent in March to 69.8 percent in April.
Despite these inflationary pressures, Finance Minister Mehmet Şimşek has stated that monetary policies are being implemented in a stable manner.
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