Turkish Central Bank maintains key interest rate at 50% Amid inflation, economic challenges

The Central Bank of Türkiye has decided to keep its key interest rate unchanged at 50 per cent per annum, marking the fifth consecutive meeting at this level.

This rate, applied to seven-day repo operations, remains the highest since 2002, in line with expert forecasts, Caliber.Az reports via Russian media.

In its statement, the Central Bank highlighted that Türkiye’s core inflation rate for July was lower than the average observed in the second quarter. The Bank noted that indicators for the third quarter suggest a continued weakening in domestic demand, which is contributing to a slowdown in inflation.

Although there has been a reduction in the rate of increase in commodity prices, services inflation has been slower to adjust. Persistent high levels of services inflation, coupled with geopolitical factors, continue to pose risks to overall inflation, the Bank stated.

Data for July revealed that Türkiye’s inflation rate decreased to 61.78 per cent year-on-year, down from 71.6 per cent in June. This marks the second consecutive month of slowing consumer price growth, the lowest rate since October 2023. Inflation had peaked at 75 per cent in May of this year.

In the currency markets, the US dollar rose to 33.8381 Turkish lira per dollar on August 20, up from 33.7542 lira per dollar at the previous session's close. Since the beginning of the year, the dollar has appreciated by 14.8 per cent against the lira.