Ankara: The Turkish central bank has decided to keep its benchmark interest rate for one-week repurchase transactions steady at 37 percent. This decision was made during a meeting of the Monetary Policy Committee, chaired by Governor Fatih Karahan.

According to National Iraqi News Agency, the Central Bank of Turkey announced that the overnight lending rate would remain at 40 percent, while the overnight borrowing rate would stay at 35.5 percent. The statement highlighted that despite monthly fluctuations, recent developments in inflation and leading indicators suggest a weakening of the underlying inflation trend.

The bank noted that data on economic activity, coupled with the limited impact of supply shocks on domestic prices, confirms the continued weakness of domestic demand. It also pointed out that rising energy prices due to geopolitical developments pose an upside risk to inflation expectations.

The Central Bank emphasized its vigilance in monitoring the impact of geopolitical developments on the inflation outlook through cost, economic activity, and expectations channels. It assured that maintaining a tight monetary policy until price stability is achieved will support efforts to reduce inflation through demand, exchange rate, and expectations channels.

Governor Karahan explained that future interest rate decisions will be informed by inflation developments, its underlying trend, and expectations, ensuring the required level of monetary tightening is maintained. It is noteworthy that Turkey’s inflation rate fell to 31.51 percent year-on-year in August, with a month-on-month increase of 1.84 percent.