The Turkish Central Bank (BCT) has lowered the key interest rate, or the weekly repo interest rate, from 19% to 18%. The Monetary Policy Council held a meeting chaired by the Governor of the Bank, Sahap Kavcioglu.
Noting that the acceleration of vaccination against the novel coronavirus has improved the economy, the Council declared a cut in the key interest rate to 18%.
However, the Council noted that the risks to economic activities persist because of the new variants, despite the increase in the anti-Covid vaccination rate.
“Preliminary data shows that economic activity in Turkey will strengthen in the third quarter thanks to external demand too,” the Council statement read. The acceleration of the vaccination against the coronavirus in the country is helping to revive the sectors affected by the pandemic, including the tertiary sector and tourism. […] A current account surplus is expected for the rest of the year thanks to the increase in exports and the resuscitation of tourism activities. The improvement in the current account is important to ensure price stability. “
In addition, the Council specified that “monetary rigidity has started to cause a contraction deeper than what was expected on trade credits”.
The BCT has thus assured that it will continue to take the necessary measures to achieve the medium-term objective of 5% inflation rate.
Source Anadolu Agency