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The Central Bank of the Republic of Türkiye (CBRT) held the policy interest rate steady at 46% during its June meeting, according to a statement by the Monetary Policy Committee.
Turkish central bank keeps policy rate constant at 46%, in line with expectations. "Data for the second quarter point to a slowdown in domestic demand," it said in a statement.
The decision aligns with market expectations, as the central bank resumed repo auctions last week, including some of the largest over the past year, which helped lower the weighted average cost of funding from 49% to 46% and partially eased liquidity conditions.
In its statement, the bank reiterated its commitment to a tight monetary stance, noting that inflationary pressures persist despite a more optimistic outlook following better-than-expected May inflation data, which came in at 35.41%.
"The decisiveness regarding the tight monetary stance is strengthening the disinflation process through moderation in domestic demand, real appreciation in the Turkish lira, and improvement in inflation expectations," it noted.
Türkiye's annual inflation rate in May eased for the 12th consecutive month to 35.41%, its lowest reading since December 2021.
From May 2023 until last March, the bank raised the rate from 8.5% to 50% and then kept it constant until its meeting last December, when it lowered the rate 250 basis points to 47.5%.
The bank cut the benchmark rate at its last three meetings from 47.5% to 42.5%. In the April meeting, in a surprise move, the bank raised the rate by 350 basis points to 46%.
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