In line with market predictions, Turkish central bank increases weekly repo rate to 42.5%

On Thursday, December 21, 2023, the Central Bank, led by Chair Hafize Gaye Erkan, gathered for a meeting. At precisely 14:00, they released their decision on the interest rate.
The upcoming interest rate decision statement is drawing the attention of economists, as it will reveal monetary policy for the upcoming period.
The weekly repo rate was raised from 40.00% to 42.50%, as stated after the Central Bank's Monetary Policy Committee (MPC) meeting.
All economists involved in the market projection had anticipated a rise in interest rates, with a median expectation of 42.50%.
Economists polled by Anadolu in a survey last week estimated the bank would deliver a rate hike of 250 basis points.
The Monetary Policy Committee decided to reduce the pace of monetary tightening, as the monetary tightness is significantly close to the level required to establish the disinflation course, said the statement.
It added: "The committee anticipates to complete the tightening cycle as soon as possible."
According to the latest data from TurkStat, Türkiye's annual inflation rose to 61.98% in November, the highest rate so far this year.
The bank pledged to continue to implement quantitative tightening by extending the sterilization tools at its disposal to support the monetary tightening process.
At its November meeting, the bank increased its policy rate by 500 basis points to 40%, above market consensus.