CBRT announced its interest rate decision for June 2024.
CBRT Monetary Policy Committee left interest rates constant in June. The expectation was that the policy rate would be kept constant at 50% in June.
What Was the Dollar’s Reaction to the Interest Rate Decision?
After the CBRT decision, the dollar is traded at 32.92 TL.
CBRT’s statement regarding the latest interest rate decision is as follows:
“The Monetary Policy Committee (Board) has decided to keep the one-week repo auction interest rate, which is the policy rate, constant at 50 percent.
The weakening in the underlying trend of monthly inflation suffered a temporary interruption in May. Recent indicators confirm that domestic demand is slowing down, although still at an inflationary level. The high course and rigidity of services inflation, inflation expectations, geopolitical risks and food prices keep inflationary pressures alive. The Board closely monitors the compliance of inflation expectations and pricing behavior with forecasts.
The effects of monetary tightening on loans and domestic demand are closely monitored. Although the Board decided to keep the policy rate constant, taking into account the lagged effects of monetary tightening, it reiterated its cautious stance against upside risks on inflation. The tight monetary policy stance will be maintained until a significant and permanent decline in the underlying trend of monthly inflation is achieved and inflation expectations converge to the predicted forecast range. If a significant and permanent deterioration in inflation is anticipated, the monetary policy stance will be tightened. Determined stance in monetary policy; It will reduce the main trend of monthly inflation through balancing in domestic demand, real appreciation in the Turkish lira and improvement in inflation expectations, and disinflation will be established in the second half of the year.
In case of unforeseen developments in the credit and deposit markets, the monetary transmission mechanism will be supported by additional macroprudential steps. Liquidity developments are closely monitored. Sterilization tools will be diversified and used effectively when necessary.
The Board will determine policy decisions in a way that will reduce the main trend of inflation and provide monetary and financial conditions that will bring inflation to the 5 percent target in the medium term, taking into account the lagged effects of monetary tightening.
Indicators regarding inflation and its main trend will be closely monitored and the Board will resolutely use all the tools at its disposal in line with the main goal of price stability.
“The Board will make its decisions within a predictable,>
