He Central Bank of the Republic of Turkey (CBRT) announced Thursday that raised its policy rate (one week repo) from 15% to 17%. The rise was greater than the market consensus.
The monetary authority indicated that inflation expectations continue to negatively affect the behavior of prices and the inflation outlook.
They affirmed that the data and indicators of the national income of the last quarter “point to a solid course of the economic activity.” They see that the restrictions introduced due to the increasing number of cases of coronavirus create uncertainty about the short-term outlook for economic activity. , particularly the service sector.
With regard to monetary policy, estimate that the current state of adjustment will remain decisively until the indicators point to a permanent fall in inflation.
Market reaction
The lira appreciated in the market after the CBRT decision. USD / TRY fell to 7.56, the lowest level since November 20. It is trading at 7.59, down 0.65% from Wednesday.
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