Disinflation

As widely expected, the Turkish Central Bank has kept the key interest rate, the one-week repo auction rate, on hold for an eighth straight month at 50 percent.

While inflation expectations and price behavior tend to improve, they continue to pose risks to the disinflation process, the bank said in a statement released after the Monetary Policy Committee meeting on Nov. 21.

The annual inflation rate further slowed from 49.38 percent in September to 48.58 percent in October, the lowest rate since July 2023, according to data from the Turkish Statistical Institute (TÜİK) on Nov. 4.

Consumer prices advanced 2.88 percent last month, easing from 2.97 percent in September.

As widely expected, Türkiye's Central Bank has extended its interest-rate pause for a seventh straight month.

The bank will keep the policy rate, the one-week repo auction rate, unchanged at 50 percent.

The policy turnaround has reduced Türkiye's economic imbalances and revived confidence, the International Monetary Fund (IMF) has said.

Headline inflation has fallen as tighter financial conditions are weighing on domestic demand, it noted in a statement on Article IV consultation.

Türkiye is in a period of reducing uncertainties to a minimum, Vice President Cevdet Yılmaz has stated, stressing that the country continues to ensure predictability, sustainability and confidence.

The decline in annual inflation continued for a fourth month in a row, easing from 51.97 percent in August to 49.38 percent in September, data from the Turkish Statistical Institute (TÜİK) showed on Oct. 3.

This marked the lowest annual inflation rate since July 2023.

Consumer prices advanced 2.97 percent month-on-month after rising 2.47 percent in August.

Türkiye's economic program is working, producing results, while risks are declining, Vice President Cevdet Yılmaz has said.

In an interview with private broadcaster CNN Türk, Yılmaz noted that the international rating companies upgraded the country's ratings, while Türkiye's credit default swaps (CDS) have been falling.

In a widely expected move, Türkiye's Central Bank has left its policy rate unchanged at 50 percent for the sixth month in a row.

In a statement released after the Monetary Policy Committee meeting on Sept. 19, the bank reiterated that it remains highly attentive to inflation risks.

Inflation expectations of households, companies and experts continue to differ significantly, a Central Bank survey has shown.

Households' 12-month ahead inflation expectations increased from 71.98 percent in July to 73.14 in August, which marked the highest level in households' inflation expectations since May.

Turkey's central bank held interest rates steady at 50% for a fifth straight month on Tuesday, as expected, and repeated that it remains vigilant to inflation risks even as it expects disinflation to gain pace.