The Central Bank of the Republic of Turkey (CBRT) just announced the interest rate decision. The central bank kept the interest rate of late liquidity window at 12.25 percent within the scope of the decision taken by the Monetary Policy Board. CBRT kept interest rates constant.
The curiously expected news of the economy is just announced by the Central Bank.
The Central Bank announced in response to interest-related anticipations. According to the statement made by the CBRT, interest rates were kept constant.
The Central Bank did not change its interest rates following the meeting of the Monetary Policy Committee (PPK) Thus, the policy interest rate was kept at 8 percent, the lower and upper banks of interest rate were at 7.25 percent and 9.25 percent, respectively, and the Late Liquidity Window lending rate was kept at 12.25 percent.
Here is the text of the statement made by the Central Bank;
Main objective of the Central Bank is to provide price stability. The price stability does not mean that prices will not change at all, but it means that the tendency to increase (inflation) or deflation (deflation) in the general price level is prevented. Thus, the purchasing power of the Turkish lira and therefore its reliability as a currency is preserved.
In the Central Bank Law, the phrase “the bank supports the government’s policies for growth and employment provided that it does not contradict the intention to maintain price stability”. The low inflation rate is one of the conditions for achieving long-term economic goals. Therefore, the biggest contribution the Central Bank can make to policy for economic growth and employment is to ensure price stability. In this way, while the prices are stable, economic units can make better informed decisions and therefore resources can be distributed more efficiently while lower real interest rates will support investment decisions thanks to the decrease in inflation risk premium that will create low inflation.
The inflation targets are determined in three-year periods with the government. Accordingly, an inflation target of 5 percent was set for the 2013-2015 period. The annual rate of change of the consumer price index at the end of the year is used as the inflation target. The inflation target is set at 2 points above and below the uncertainty interval, and if the inflation rate at the end of the year is outside the range of 3 to 7 percent, the Bank will write an open letter to the government within the framework of accountability.
Decisions of the Republic of Turkey Monetary Policy Board
The Monetary Policy Committee pronouncements are one of the main means of communication in monetary policy.
The Monetary Policy Board consists of seven members, one from the Governor, one from the Board of Governors, one from among the Members of the Bank, and a member appointed jointly on the President’s (Governor) proposal.
The Board meets monthly on a pre-announced calendar. Immediately following the meeting, the decision of the Monetary Policy Board and its brief reason are announced on the Central Bank’s website. The summary of the meeting, including the detailed evaluations of the Board, is published on the General Network page within five business days following the meeting.