The Turkish Central Bank on Thursday kept its one-week repo rate – also known as the policy rate – steady at 14% in line with market expectations.
The bank said in a statement that it is expecting disinflation process to start on the back of measures taken and financial stability along with the decline in inflation thanks to the base effect.
It also underlined the level of capacity utilization and other leading indicators showing that domestic economic activity remains strong thanks to robust external demand.
“Strengthening of the improving trend in current account balance is important for price stability,” the statement said, adding: “The Committee assesses that extending long-term Turkish lira investment credit will play a significant role in achieving this target.”
The bank also said the share of sustainable components of economic growth increases, with the current account balance expected to post a surplus in 2022.
Turkey saw a 48.69% annual hike in consumer prices in January.
In January, the bank sent an open letter to the government to explain why inflation diverged from its target of 5% and the measures to reach its goals concerning prices.
The statement also underscored that the bank is currently conducting a “comprehensive monetary policy review” to achieve permanent price stability, and the strategy it adopted to boost the use of Turkish lira in the country – “liraization” – would be “the most crucial part of this process.”