Turkish Monetary Policy Pause Shortlived and Ends With Big Interest Rate Hike
March 21, 2024
Turkish consumer price inflation accelerated from 38.2% in mid-2023 to a 15-month high in February of 67.1%. But after leaving its policy interest rate unchanged at 45% after February’s policy meeting, officials at the Central Bank of Turkey were not expected to modify their stance, which had seen the rate raised from 8.5% since the start of 2023. Instead, tightening resumed with a rate jump of 500 basis points to 50.0%, which is still shy of the current inflation pace. According to today’s released statement, “tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range.” More increases will be done if significant and persistent price inflation continues.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Central Bank of Turkey
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