Turkish Central Bank to maintain interest rates ahead of run off

By Al Mayadeen English
Source: Agencies
20 May 2023 21:00

The Monetary Policy Committee of the Central Bank of the Republic of Turkey will meet on May 25 to make a final decision regarding the status of interest rates in the country ahead of the Presidential election run-offs.

A worker counts Turkish liras banknotes in an exchange currency shop in Istanbul, Turkey, Tuesday, May 2, 2023. (AP)

Ahead of the second round of voting for the Turkish Presidential election, the Central Bank of the Republic of Turkey, according to the Turkish business daily, Dunya, is expected to maintain interest rates unchanged at 8.5%.

According to Dunya News, the projection was concluded following a survey that included 19 economists. However, the final decision will be made on May 25, three days before the run-off, when the bank's Monetary Policy Committee is set to meet.

Between September 2021 and February 2023, the central bank reduced borrowing rates nine times in a row in an effort to contain inflation.

Inflation in Turkey down to 43.7%, first low in 16 months

The Turkish Statistical Institute Turkstat revealed, early in May, that the annual consumer price growth in Turkey plunged to 43.68% in the month of April, which also recorded a monthly inflation rate of 2.39%.

In its statement, it said, "A change in the general index was realized in CPI [consumer price index] on the previous month by 2.39%, on December of the previous year by 15.21%, on the same month of the previous year by 43.68%".

The slowing down of inflation was seen in some groups of goods and services such as housing, with a 43.18% increase this month as opposed to 56.12% in March, while food and non-alcoholic beverages recorded 53.92% in April as it was 67.89% in March.

Simultaneously and according to Turkstat, the highest inflation rate of 66.62% was recorded in health, while the slowest price increase was recorded at 13.82% for clothing and footwear.

This marks the lowest inflation rate recorded in the last 16 months, per the Daily Sabah, which arrives amid voting rushes for the presidential elections next week.