Turkish Central Bank keeps benchmark interest rate at 19 percent

The Central Bank of Turkey (TCMB) maintained the policy rate at 19 percent. It was passed at the fourth Monetary Policy Committee (PPK) meeting, which was chaired by TCMB Governor Şahap Kavcıoğlu.

K. Murat Yıldız / Duvar English

The weekly repo rate remained at 19 percent, according to a statement released after the TCMB Monetary Policy Committee (PPK) meeting. Foreks polled 21 economists, and all predicted that the interest rate would remain unchanged.

At this latest meeting like the previous three, the TCMB kept the interest rate unchanged, as expected.

In January and February of 2021, the interest rate was held at 17 percent, then increased by 200 basis points to 19 percent in March. The decision was made at the April meeting to keep the interest rates at 19 percent.

In May, interest rates were also left unchanged at 19 percent. Finally, in the decision announced in June, it was announced that interest rates would remain at 19 percent.

In its full public statement after the meeting, the TCMB said: “The acceleration of vaccination around the world, particularly in developed countries, aids the global economy's recovery. By easing restrictions, economies that have made progress in their immunization programs perform better in economic activity."

"On a global scale, producer and consumer prices are rising due to a rapid recovery in global demand, an upward trend in commodity prices, supply constraints in some sectors, and an increase in transportation costs. Rising global inflation and inflation expectations continue to have an impact on international financial markets,” it said.

The bank further said that “given the high levels of inflation and inflation expectations, the current tight monetary policy stance will be decisively maintained until the forecast path of the April Inflation Report is significantly reduced. As a result, the Board decided to maintain the policy rate at its current level.”

The statement was concluded with the promise that “The Board will continue to make decisions in a manner that is transparent, predictable, and data-driven.”