Turkey's central bank keeps rates at 50%

27th Jun 2024 12:12

(Sharecast News) - Turkey's central bank has left a key interest rate on hold, it was confirmed on Thursday, as it focuses on cooling surging inflation.

The Central Bank of the Republic of Turkey's Monetary Policy Committee kept the one-week repo rate at 50%, in line with forecasts, for the third consecutive month.

It also reiterated that monetary policy would remain tight "until a significant and sustained decline in the underlying trend of monthly inflation".

The bank hiked rates by five percentage points in March to 50%, in response to runaway inflation of 75%.

The government introduced a series of policies intended to boost growth, but they also sparked soaring inflation and a prolonged cost of living crisis. In response, the bank has been ramping up rates over the last year.

However, inflation is widely agreed to have now peaked. The central bank expects inflation to reach 38% by the end of the year and 14% by the end of 2025.

Its medium-term target is 5%, although it has not provided a specific timeline for achieving that.