Ramazan Eles 
The Central Bank of the Republic of Turkey (TCMB) announced its much-anticipated interest rate decision, maintaining the policy rate at 50%, as expected. Following this announcement, the dollar did not show significant movement.
In today’s statement, TCMB confirmed that it would keep the policy rate unchanged at 50%. This decision aligns with market expectations, as the bank had previously paused its rate hikes in February after several months of increases under the new administration. This marks the seventh decision by the current administration to maintain the rate at 50%.
In previous periods, interest rates had been rapidly lowered to as low as 8.5%. However, over the past year and a half, a series of decisions have led to the rate reaching 50%. The Central Bank emphasized that the policy rate is set to ensure monetary and financial conditions that will bring down the main trend of inflation and achieve the medium-term inflation target of 5%.
In its press release regarding the interest rate decision, TCMB stated:
“The Monetary Policy Committee (MPC) has decided to keep the policy rate, which is the one-week repo auction rate, unchanged at 50%. In July, the main trend of monthly inflation showed a limited increase compared to the previous month, remaining below the second quarter average. Indicators for the third quarter suggest that domestic demand continues to slow, reducing its inflationary impact. While goods inflation is declining, improvements in service inflation are expected to be delayed. The high level and rigidity of service inflation, inflation expectations, and geopolitical developments keep inflationary risks alive. The Committee emphasized that the importance of alignment between inflation expectations, pricing behavior, and projections has increased for the disinflation process.”
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