Central Bank of the Republic of Turkey

April 20, 2016

The monetary policy committee announced a follow-up reduction of its overnight lending rate, this time of 50 basis points to 10.0%.  As in March when such was lowered by 25 basis point, the other two central bank interest rates — a 7.5% one-week repo rate and a 7.25% overnight borrowing rate were not changed.  The action in March was intended as a simplifying measure to narrow the corridor between the two overnight interest rates, which now becomes 275 basis points in width compared to 375 basis points prior to March.

A statement released today by monetary authorities calls their stance “tight” still, observes that headline inflation has fallen markedly because of lower food expenses, notes that core inflation has been stickier, asserts that structural reforms will be helpful, calls growth moderately stable, the current account improved and lending growth reasonable, and notes continuing export growth in spite of geopolitical risks.  Future policy will hinge on the inflation outlook.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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