Turkish central bank keeps year-end inflation forecast unchanged

Turkey’s central bank will keep its year-end inflation forecast unchanged، maintaining a tight monetary policy to achieve a sustained reduction in inflation، Governor Fatih Karahan announced on Thursday، 

The Turkish central bank will maintain its restrictive monetary policy until a sustained decline in monthly inflation is observed and rejects premature interest rate cuts.

Karahan emphasized the need for a significant and lasting slowdown in inflation dynamics.

The bank’s inflation forecasts for this year and next remain unchanged. They expect annual consumer inflation to slow to 38 percent by the end of 2024 and to 14 percent the following year، a decline of 62 percent.

The central bank has raised interest rates significantly since June 2023، with the current rate at 50 percent. Despite some expectations of an easing cycle، the bank is determined to keep rates high until inflation targets are met.