the central bank announced the long-awaited decision on interest rates.
The Central Bank’s Monetary Policy Committee, which met in July, kept the policy rate at 14%.
Economists expected the interest rate to remain stable at 14%.
HE HAS NOT TOUCHED INTEREST THIS YEAR
In September, October, November and December last year, the Central Bank made a total cut of 5 percentage points in interest rates. The Central Bank did not change the interest rate this year.
The statement made by the Council regarding the decision was as follows:
“Geopolitical risks, the effects of which continue to mount, continued to have a negative impact, causing a further weakening of economic activity around the world. Global growth forecasts for the period ahead continue to be put on hold. downwards and the possibility of a recession increases Global food security trade bans and growing commodity price uncertainties High and volatile prices and continued supply constraints in some sectors, in particular in staple foods, lead to higher international producer and consumer prices.
“DIVERSITY IN THE MONETARY POLICY OF COUNTRIES CONTINUES”
The effects of high global inflation on inflation expectations and international financial markets are being closely watched. However, central banks in developed countries point out that the rise in inflation could take longer than expected due to rising energy prices, the mismatch between supply and demand and the rigidity labor markets. According to the economic prospects which differ according to the countries, the divergence continues in the monetary policy measures and the communications of the central banks of the developed countries. It is observed that efforts to find solutions with new practices and support tools developed by central banks to increase uncertainty in financial markets have increased by diversifying.
“ADDITIONAL MEASURES WILL BE APPLIED IF NECESSARY”
The strong growth at the start of the year continued in the second quarter under the positive effect of foreign demand. Employment gains are more positive than in comparable economies. While the share of sustainable components in the composition of growth has increased, the strong improvement in the current account balance due to tourism continues. In addition, high energy prices and the possibility of a recession in the main export markets are maintaining current account risks. It is important for price stability that the current account balance becomes permanent at sustainable levels. Although we see that it has lost momentum, the rate of credit growth and the meeting of accessible financial resources with economic activity in accordance with its vocation are closely monitored. The Council will resolutely implement the macroprudential policy it has strengthened and, if necessary, will implement additional measures.
“THE DISINFLATION PROCESS IS PLANNED TO BEGIN”
In the observed rise in inflation; The increase in energy costs caused by geopolitical developments, the effects of price formations far removed from economic fundamentals and the strong negative supply shocks caused by increases in the world prices of energy, food and agricultural raw materials continue to have an influence. The Council foresees that the process of disinflation will begin with the restoration of the environment of global peace, as well as the measures taken and implemented with determination to strengthen sustainable price stability and financial stability. In this context, the Board decided to keep the policy rate constant.
In order to institutionalize price stability in a sustainable manner, the CBRT continues to examine an overarching policy framework that encourages permanent and enhanced integration across all policy instruments. Credit, guarantee and liquidity policy measures, for which the assessment processes have been completed, will continue to be used to strengthen the effectiveness of the monetary policy transmission mechanism.
“ALL VEHICLES WILL BE USED IN THE LYRALING STRATEGY”
In line with its main objective of price stability, the CBRT will resolutely continue to use all the tools at its disposal within the framework of the debt consolidation strategy, until the emergence of strong indicators indicating a permanent decline in inflation and the medium-term objective of 5% has been achieved. The stability to be achieved in the general price level will positively affect macroeconomic stability and financial stability through the fall in country risk premiums, the continuation of the reverse substitution of currencies and the upward trend in foreign exchange reserves, and the fall permanent financing costs. Thus, a fertile ground will be created for the continued growth of investment, production and employment in a healthy and sustainable manner.
The Central Bank meets on certain dates each month and holds meetings of the Monetary Policy Committee. After these meetings, the interest rate decision is announced on a monthly basis.
2022 CENTRAL BANK MEETING DATES
The dates of the Central Bank meetings for the rest of the year are as follows:
August 18, 2022
September 22, 2022
October 20, 2022
November 24, 2022
December 22, 2022
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