Central Bank meeting this week to decide on rates
Istanbul
Policymakers from Turkey’s Central Bank are due to meet later this week for a decision on the key interest rate.
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In a widely expected move, at its latest meeting in April, the Central Bank’s Monetary Policy Committee (MPC) kept the one-week repo rate – also known as the policy rate – unchanged at 14 per cent.
MPC members will meet on May 26 to consider the critical rate. The central bank is expected to keep the key rate stable at its current level at a time when monetary authorities in other countries are raising rates in the face of massive inflation.
Inflation is also increasing in Turkey. Consumer prices increased by 7.25 per cent on a monthly basis in April. The annual inflation rate rose to 69.97 per cent from 61.14 per cent in March.
“The Central Bank will continue to use all available tools decisively within the framework of the Liarisation Strategy, until strong indicators point to a permanent decline in inflation and 5 per cent over the medium term in pursuit of the primary objective of price stability.” The target is not achieved,” the bank said in a statement after the PMC meeting last month.
Markets are also expecting a word from the Central Bank on inflation-indexed bonds. Officials have been working on a possible issuance of those bonds for some time now. If those bonds offer higher returns, they may offer alternatives to stocks and foreign currencies and increase demand for the Turkish lira, helping the local currency to appreciate.
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Meanwhile, the Financial Stability Committee, chaired by Treasury and Finance Minister Nureddin Nebati, convened for the fourth time on 21 May.
“Assessed the effects of global and local inflation on the Turkish economy and exchanged views on the steps to be taken in the future to fight inflation and maintain financial stability,” said a statement issued after the meeting. Went.”
