The decision comes as the bank continues its efforts to combat inflation, which has been a persistent challenge for the Turkish economy.
The bank highlighted key economic indicators, noting that the underlying inflation trend showed improvement in October. “Domestic demand continues to slow, reaching disinflationary levels,” the statement said. It also pointed out that while core goods inflation remains low and services inflation shows signs of improvement, unprocessed food inflation remains high due to temporary supply issues.
The MPC reaffirmed its commitment to a tight monetary policy to strengthen disinflationary trends. “The decisive implementation of a tight monetary stance will moderate domestic demand, support real appreciation of the Turkish lira, and improve inflation expectations,” the bank stated. It also emphasized the importance of fiscal policy coordination in reinforcing the disinflation process.
The committee pledged to maintain the current monetary policy until a significant and sustained decline in inflation is observed and inflation expectations align with the bank’s forecasts. Adjustments to the policy rate will be guided by both realized and expected inflation levels to ensure alignment with disinflation goals.
The bank underscored its readiness to implement additional macroprudential measures in the event of unexpected developments in credit and deposit markets. It also highlighted ongoing efforts to manage liquidity conditions and deploy sterilization tools effectively.
Taking into account the lagged effects of previous monetary tightening measures, the MPC reiterated its commitment to creating the necessary monetary and financial conditions to reduce inflation. The ultimate target remains achieving a 5% inflation rate in the medium term.
The MPC stated that its decisions will be data-driven, transparent, and predictable. “Indicators of inflation and the underlying inflation trend will be closely monitored, and all tools at the committee’s disposal will be used decisively to maintain price stability,” the statement read.
The bank also announced that a detailed summary of the MPC meeting would be released within five working days, providing further insights into its policy decisions.
This decision underscores the Central Bank of Türkiye’s determination to navigate inflationary pressures while maintaining economic stability through coordinated fiscal and monetary measures. (ILKHA)