The Central Bank of the Republic of Turkey (CBRT) announced Thursday that it left its monetary policy rate (one-week buyback) unchanged at 19%, in line with market consensus. In the statement, the central bank refrained from repeating last month’s promise to maintain a policy of adjustment “resolutely”.
Was the first meeting chaired by Sahap Kavcioglu, after the departure of Naci Agbal. This event of weeks ago had triggered a sharp devaluation of the lira. This in part motivated no significant changes to be announced today. Following the decision to hold the interest rate, the USD / TRY fell to 7.98 and then jumped to 8.16 and then stabilized around 8.10.
In the statement, The central bank indicated that despite the restrictive effect of the pandemic, domestic economic activity is strong, led by internal and external demand. He noted that the upward trend in commodity prices has slowed. He warned that there are risks to economic activity in either direction depending on the progress of the pandemic and the vaccination process.
The central bank affirmed that it will continue to use decisively all available instruments in pursuit of the main objective of price stability and confirmed that that the policy rate will continue to be set above inflation to maintain a strong disinflationary effect.
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