Agencies
Istanbul
Turkey’s central bank kept its policy rate unchanged at 9 percent for a second month on Thursday, after ending an easing cycle that went against a global tightening trend and as economists expect a slow decline in inflation from thecurrent 64 percent.
The bank said the level and underlying trend of inflation have improved with support from an integrated policy approach. The slowdown in growth in the fourth quarter due to weakening foreign demand was compensated by relatively strong domestic demand, it said.
“It is critically important that financial conditions remain supportive for the sustainability of structural gains in supply and investment capacity by preserving the growth momentum in industrial production,” the central bank’s policy committee said.
Inflation, which was stoked by a currency crisis sparked by a previous easing cycle in 2021, came down to 64.3 percent in December from a peak of 85.5 percent in October, largely due to a favourable base effect.
While the central bank expects inflation to fall to 22.3 percent by the end of 2023, it will publish its report for the new year next week.
All economists surveyed by Anadolu Agency (AA) on Monday expected the bank to keep the interest rate constant for this week.
All 22 economists in a Reuters poll had predicted no change to policy.
Turkiye’s new economic program has prioritised rate cuts to boost production, employment and investment with the aim of turning the country’s current account deficits into a surplus.
