Rate Cut in Turkey

September 12, 2019

Policymakers at the Central Bank of the Republic of Turkey slashed the one-week repo rate by a greater-than-expected 325 basis points in follow-up to a 425-basis point cut in July from a peak of 24.0% that had prevailed since a 625-basis point increase in September of 2018. The rate now becomes 16.5%, which the monetary policy committee considers cautiously tight. Officials took into consideration the facts that policy stimulus is occurring at other central banks and a downward but unspecified revision of the future disinflation path assumed in July’s Inflation Report. Actual inflation, core inflation, and price expectations are moderating, and domestic demand is growing slowly.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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