The decision follows ongoing concerns about inflation and a cautious outlook on the domestic economy.
The committee highlighted that inflation trends saw a slight increase in September. Indicators from the third quarter suggest a slowdown in domestic demand, approaching disinflationary levels. While inflation in core goods remains low, services inflation is expected to improve by the last quarter. However, the committee noted that uncertainty regarding inflation trends has risen due to recent data, posing potential risks to the disinflation process.
"The tight monetary stance will bring down the underlying trend of monthly inflation through moderation in domestic demand, real appreciation of the Turkish lira, and improvement in inflation expectations," the committee stated. It emphasized that this disinflationary process will strengthen over time but reiterated the importance of remaining vigilant about inflation risks.
The committee affirmed that the current tight monetary policy will be maintained until there is a significant and sustained decline in inflation, aligning expectations with projected targets. It also indicated that monetary policy tools will be employed effectively if any significant or persistent deterioration in inflation is foreseen.
Regarding market conditions, the committee said it would support the monetary transmission mechanism through additional macroprudential measures if unanticipated developments arise in credit and deposit markets. Liquidity conditions will continue to be assessed, and sterilization tools will be implemented as needed to stabilize inflation trends.
The committee's ultimate goal is to create the monetary and financial conditions necessary to reach the Central Bank's medium-term inflation target of 5%, while ensuring a predictable, data-driven, and transparent policy approach.
A full summary of the Monetary Policy Committee's meeting will be published within five working days. (ILKHA)