Turkey's Central Bank Raises Interest Rate to 42.5%, Signals Peak Is Near
December 21 2023 - 5:42AM
Dow Jones News
By Ed Frankl
Turkey's central bank on Thursday raised its key interest rate
for the seventh consecutive time, but slowed the pace of the rise,
signaling that monetary tightness was close to the rate required to
slow inflation.
The central bank raised the country's benchmark interest rate,
the one-week repo rate, to 42.5% from 40%, matching expectations
from a consensus of economists polled by FactSet.
It came after Turkish inflation edged up in November to 62% from
61% in October, having continued to rise through the summer.
The bank said the level of domestic demand, stickiness in
services inflation, and geopolitical risks continues to keep
inflation pressures alive.
However, recent indicators have also suggested that domestic
demand continues to ease as monetary tightening impacts the economy
more clearly, it added.
"Assessing that monetary tightness is significantly close to the
level required to establish the disinflation course, the [monetary
policy] committee reduced the pace of monetary tightening," the
bank said.
The inflation trend was also helped by continued increases in
foreign-exchange reserves, a current-account surplus and the
accelerated increase in domestic and foreign demand for
lira-denominated assets, it added.
The lira has fallen 36% against the U.S. dollar in the year to
date.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
December 21, 2023 06:27 ET (11:27 GMT)
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