Turkey Central Bank Cuts Policy Rate to 13% From 14%
By Nihad Ahmed
The Turkish central bank on Thursday made a surprising move as
it reduced its benchmark rate by 100 basis points to 13%, even as
inflation rose again last month.
The bank was largely expected to keep its policy stance
The annual inflation rate climbed to 79.6% in July from 78.62%
in June, but the modest rise suggests it is nearing a peak, Capital
Sharp and disorderly falls in the lira, hikes to natural gas and
electricity prices, and a jump in commodity prices from the Ukraine
war have pushed Turkey's inflation rate to the highest level in
more than two decades.
But the bank has also blamed the increase in inflation on
"effects of pricing formations that are not supported by economic
fundamentals," as well as on higher energy, food and agricultural
commodity prices and geopolitical developments.
This is the first time the central bank has cut its policy rate
since last year after keeping it constant since December 2021
following an easing cycle.
"The Committee expects disinflation process to start on the back
of measures taken and decisively implemented for strengthening
sustainable price and financial stability along with the resolution
of the ongoing regional conflict," the bank said.
Write to Nihad Ahmed at firstname.lastname@example.org
(END) Dow Jones Newswires
August 18, 2022 07:41 ET (11:41 GMT)
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