CBRT keeps policy rate (one-week repo auction rate) unchanged at 24%

In a widely expected decision, the Central Bank of the Republic of Turkey (CBRT) today announced that it kept the policy rate (one-week repo auction rate) constant at 24%. With the initial reaction, the USD/TRY pair gained more than 500 pips in a matter of minutes and jumped to its highest level since early October at 5.9627. At the moment, the spot is up 1.3% on the day at 5.94.

Key takeaways from the press release

• Recently released data show that rebalancing trend in the economy has continued. 
• Current account balance is expected to maintain its improving trend.
• Developments in domestic demand conditions have led to some improvement in inflation indicators.
• Higher food and import prices and the elevated course of inflation expectations point to continued risks to price stability.
• Accordingly, the Committee has decided to maintain the tight monetary policy stance until inflation outlook displays a significant improvement.
• The Central Bank will continue to use all available instruments in pursuit of the price stability objective.