The Central Bank Announces Its New Interest Rate Decision! As of 14:00 on Wednesday, February 19, 2020, the Monetary Policy Committee of the Central Bank of the Republic of Turkey convened. At the conclusion of this closely watched meeting, the Bank decided to cut the policy rate — the one-week repo auction rate — by 50 basis points. The rate has been reduced from 11.25% to 10.75%.
The Central Bank of the Republic of Turkey confirmed a 50 basis point reduction. According to the announcement issued after the meeting chaired by Central Bank Governor Murat Uysal, the Monetary Policy Committee lowered the policy rate from 11.25% to 10.75%. The official statement reiterates that the one-week repo auction rate was reduced by 50 basis points, bringing it to 10.75%.
Remarks from the Central Bank and the Monetary Policy Committee Meeting
The remarks made at the Central Bank and Monetary Policy Committee meeting emphasized that the recent recovery in economic activity is continuing. While the sectoral breadth of economic activity has been improving, signs of recovery in investment and employment remain present, albeit modest.
Improvements in competitiveness continue to have a positive effect, although a weakening global growth outlook has partially slowed external demand. The contribution of net exports to growth has declined, while disinflation and improvements in financial conditions support continued economic recovery. The current account balance has shown notable improvement recently; maintaining a moderate course in the coming period is important for the macro policy mix.
The Central Bank Will Do Its Utmost to Maintain Stability
The Committee concluded that sustaining the downward trend in inflation is crucial for reducing the country’s risk premium, lowering long-term interest rates, and supporting the ongoing economic recovery. To ensure that disinflation proceeds in line with the targeted path, a cautious stance in monetary policy remains necessary. Monetary policy settings will be determined by taking into account indicators related to the main trend and designed to secure the continuity of the decline in inflation. The Central Bank will continue to use all available instruments to preserve price stability and financial stability.