Turkish central bank keeps policy rate constant at 50%

The monetary policy decisions in March have led to a significant tightening in financial conditions.

Observing that despite an ongoing decline, the underlying trend of monthly inflation in March was higher than expected, the committee reiterated that it remains highly attentive to inflation risks. The medium-term inflation target is 5 per cent.

While imports of consumption goods and gold contribute to the improvement in the current account balance, other recent indicators imply that domestic demand remains resilient.

The tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range, the central bank said in a release.

Monetary policy stance will be tightened in case a significant and persistent deterioration in inflation is foreseen, it remarked. Disinflation will be established in the second half this year.

ALCHEMPro News Desk (DS)