Turkish Central Bank Keeps Interest Rate Unchanged for Sixth Consecutive Meeting

On September 19, the Central Bank of Turkey maintained its key interest rate at 50% per annum, marking the sixth straight meeting where it has held the rate at its highest level since 2002.

According to the Central Bank's statement, the decision was based on the fact that the assessment of core inflation had not changed since the previous meeting in August.

While the risk of accelerating consumer price growth remains, a weakening in domestic demand, partly driven by high interest rates, is exerting downward pressure on inflation.

"Indicators from the third quarter suggest that domestic demand in Turkey continues to soften, which is helping to slow inflation," the Central Bank's statement noted.

The bank also emphasized that its tight monetary policy will remain in place until there is a significant and sustained reduction in core inflation, and inflation expectations fall closer to the target range.

It’s worth noting that back in March, the Central Bank raised interest rates by 500 basis points—from 45% to 50%—in response to rising inflation that exceeded forecasts.