Turkish Central Bank Keeps Rate On Hold

(RTTNews) - The Central Bank of the Republic of Turkey left its benchmark interest rate unchanged for the fifth straight session on Tuesday.

The Monetary Policy Committee of the CBRT decided to keep the one-week repo auction rate at 50.00 percent.

The bank reiterated that the 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.

Policymakers observed that domestic demand continued to slowdown with diminishing inflationary impact. However, stickiness in services inflation, inflation expectations and geopolitical developments keep inflationary risks alive.

Although inflation fell sharply to 61.8 percent in July, it will take at least a few more months of disinflation before the CBRT might begin to lay the groundwork for cutting interest rates, Capital Economics' economist Nicholas Farr said.

Even then, inflation is expected to fall a bit more slowly than the central bank is expecting over the rest of this year, the economist noted. The first interest rate will not arrive until early 2025, Farr added.