- ORIGINAL NEWS
Turkey ends hiking cycle after 8 months, holding key rate at 45%
- SUMMARY
The Central Bank of Turkey opted to maintain the key interest rate at 45%, despite soaring inflation rates and several consecutive months of rate hikes.
This decision aligns with what was indicated earlier by the Bank, that this would be the last in a series of rate increases over the past year.
Over the last few months, inflation in Turkey has continued on an upward trend, primarily driven by a significant increase in consumer prices.
The Country has experienced its biggest monthly surge in prices since August, reaching 6.7% in January.
The annual inflation rate stands at a staggering 64.8%.
Economists anticipate that the current interest rate will likely be held until the end of 2024, supported by early predictions of potential easing in inflation rates.
These factors indicate the possibility of a change in monetary policy approach later in the year.
The decision signals a consistent strategy within the Central Bank under the newly appointed governor, Fatih Karahan, who took office in early February.
His approach is in line with his predecessor’s outlook.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“Economists expect a hold on the current interest rate for much of 2024, and see inflation roughly halving by the end of the year.”
“With inflation likely to end the year at 30-35% (broadly in line with the CBRT’s forecast of 36%), there is still a possibility that the central bank starts an easing cycle before the end of the year, which many analysts are expecting”
Negative
“Inflation in the country of 85 million last month jumped 6.7% from December — its biggest monthly increase since August  — and rose 64.8% year-on-year.”
“Consumer prices in the country of 85 million last month jumped 6.7% from December — its biggest monthly jump since August  — according to the Turkish central bank’s figures.”