Breaking News: The Central Bank Announces July 2020 Interest Rate Decision. According to the latest bulletin, the Monetary Policy Committee of the Central Bank of the Republic of Turkey held its July 2020 meeting. Following the meeting, the interest rate decision was announced. In line with market expectations, the Central Bank decided to keep the policy rate unchanged at 8.25 percent. Economists had also expected no change in interest rates. In the survey conducted ahead of the Central Bank’s Monetary Policy Committee meeting on Thursday, July 23, all participating economists predicted that the policy rate would remain unchanged. The market expectations survey for the meeting was completed with the participation of 14 economists; none of the 14 expected a change in the policy rate.
The Central Bank Has Cut Rates by 1,575 Basis Points Since Last Year
The Central Bank has reduced rates by a cumulative 1,575 basis points since it began easing last July. At its previous meeting the Bank refrained from making a change despite market expectations for a cut. In the Central Bank’s expectation survey, year-end inflation was forecast at 10.22 percent, inflation 12 months ahead at 9.33 percent, and inflation 24 months ahead at 8.38 percent. The Central Bank’s own inflation projections stand at 7.4 percent for the end of 2020 and 5.4 percent for the end of 2021. Central Bank Governor Murat Uysal will present the third Inflation Report of the year on July 29; markets will closely watch whether inflation expectations are adjusted. According to the Turkish Statistical Institute (TÜİK), the latest annual consumer inflation rate was announced as 12.69 percent.
The Next CBRT Meeting Is Scheduled for August 20, 2020
The next meeting of the Central Bank of the Republic of Turkey is scheduled for August 20, 2020. In the statement issued after the recent meeting, the Bank noted that global growth weakened further in the second quarter due to developments related to the coronavirus pandemic. Although partial recovery signals can be observed in the third quarter as countries begin to normalize activity, uncertainty about the pace and durability of that recovery remains high. Both advanced and emerging economies continue to implement expansive monetary and fiscal measures. The effects of the pandemic on markets are being monitored closely. Recently implemented monetary and fiscal measures aim to limit the pandemic’s negative impact on the Turkish economy and to support the economy’s production potential. Despite declines in tourism revenues caused by the pandemic, an improvement is expected as travel restrictions are eased.