Monetary inflation

Following the promising June CPI print, international banks have started to lower their inflation expectations for Türkiye.

Last month, consumer prices increased by 1.64 percent from May, which was lower than expected. The annual inflation rate slowed from 75.45 percent to 71.6 percent.

Recent data on inflation and economic expansion strengthen arguments for additional interest rate cuts by the European Central Bank, with two more this year, according to statements by Board member and Bank of Greece Governor Giannis Stournaras to Bloomberg.

The eurozone's annual rate of inflation cooled in June in line with analysts' expectations thanks to a slowdown in food and energy price rises, official data showed .

The European Central Bank will welcome the slowdown in inflation again but the rate has remained stubbornly above the Frankfurt-based body's 2 percent target.

As widely expected, the Central Bank has opted to keep the policy rate, the one-week repo auction rate, stable at 50 percent.

Bank of Greece Governor Yannis Stournaras suggests in the Monetary Policy Report published on Wednesday that the containment of salary raises and goods and services price hikes to levels compatible with the medium-term inflation target, as well as increased checks to ensure respect of competition rules and the imposition of sanctions where necessary and, finally, the removal of all kinds of obs

Türkiye's Central Bank will meet later this week to decide about its policy rate, the one-week repo auction rate.

Most economists expect the bank to keep its key rate steady at 50 percent when members of the Monetary Policy Committee (MPC) meet on June 27.

The European Central Bank on Thursday made its first interest rate cut since 2019, reducing borrowing costs from record highs, but the path ahead remains unclear with inflation volatile.

The key deposit rate was lowered a quarter point to 3.75 percent. Rates had been on hold since October, after an unprecedented streak of hikes starting mid-2022 to tame runaway consumer prices.

Turkey's economy grew 5.7% in the first quarter, in line with expectations, official data showed on Friday, driven by strong domestic demand. Growth is expected to slow during the rest of the year as the central bank's aggressive monetary tightening in the face of soaring inflation weighs on economic activity.

(Reuters)

Türkiye's sole focus is now on price stability, Treasury and Finance Minister Mehmet Şimşek has announced, projecting September inflation to potentially reach 40 percent.

In a widely expected move, the Central Bank has held its policy rate — the one-week repo auction rate — steady at 50 percent.