Central Bank of Türkiye cuts policy rate to 37% and lowers overnight corridor rates

The Central Bank of Türkiye’s Monetary Policy Committee reduced the one-week repo auction rate to 37 percent from 38 percent and cut the overnight lending rate to 40 percent from 41 percent and the overnight borrowing rate to 35.5 percent from 36.5 percent. The Committee reiterated that a tight monetary policy stance will be maintained until price stability is achieved. The underlying trend of inflation declined in December, while leading indicators point to firmer monthly consumer inflation in January driven by food prices, with a limited rise in the underlying trend. Demand conditions in the last quarter continued to support disinflation, albeit at a moderating pace, while inflation expectations and pricing behavior were cited as ongoing risks. The policy rate will be set to ensure the tightness required by the projected disinflation path in line with interim targets, taking into account realized and expected inflation and its underlying trend, with the step size reviewed prudently on a meeting-by-meeting basis.