Monetary policy decisions in March led to a significant tightening of financial conditions.
Noting that while the monthly inflation trend in March remained higher than expected, the committee reiterated that it remains extremely attentive to inflation risks. The medium-term inflation target is 5%.
The Turkish central bank's monetary policy committee yesterday decided to keep the policy interest rate unchanged at 50% to guard against the delayed effects of monetary tightening. Noting that while the monthly inflation trend in March remained higher than expected, the committee said it remains extremely attentive to inflation risks.
While imports of consumer goods and gold contributed to an improvement in the current account balance, other recent indicators suggest that domestic demand remains stable.
The central bank said in a statement that the tightening monetary stance will be maintained until the monthly inflation trend declines significantly and sustainably and inflation expectations converge to the forecast range.
Monetary policy stance will be tightened in the event of a significant and sustained decline in inflation. Deflation will be established in the second half of this year.
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