Breaking News: Markets were holding their breath: The Central Bank has announced its highly anticipated interest rate decision!

The Central Bank of the Republic of Türkiye (TCMB) has announced its interest rate decision.

The Monetary Policy Committee (the Committee) has decided to keep the policy rate, which is the one-week repo auction rate, unchanged at 46 percent.

The Committee also kept the Central Bank's overnight lending rate at 49 percent and the overnight borrowing rate at 44.5 percent.

The Central Bank's statement is as follows:

"The Monetary Policy Committee (the Committee) has decided to keep the policy rate, which is the one-week repo auction rate, unchanged at 46 percent. The Committee also kept the Central Bank's overnight lending rate at 49 percent and the overnight borrowing rate at 44.5 percent.

The underlying trend of inflation declined in May. Leading indicators suggest that the decline in the underlying trend continued in June. Data for the second quarter show that domestic demand is slowing down. The potential effects of geopolitical developments and increasing protectionism in global trade on the disinflation process are being closely monitored. Inflation expectations and pricing behavior continue to be a risk factor for the disinflation process.

The determined stance in monetary policy strengthens the disinflation process through the rebalancing of domestic demand, real appreciation of the Turkish lira, and improvement in inflation expectations. Increased coordination of fiscal policy will also make a significant contribution to this process. The tight monetary policy stance will be maintained until a permanent decline in inflation and price stability are achieved. Accordingly, the policy rate will be determined in a way that provides the tightness required by the projected disinflation process, taking into account inflation realizations, the underlying trend, and expectations. The Committee will determine the steps to be taken regarding the policy rate with an inflation-focused, cautious, and meeting-based approach. In the event of a significant and permanent deterioration in inflation, all monetary policy tools will be used effectively.

In case of developments in credit and deposit markets outside of what is projected, the monetary transmission mechanism will be supported by additional macroprudential steps. Liquidity conditions will continue to be closely monitored and liquidity management tools will be used effectively.

The Committee will determine its policy decisions by taking into account the lagged effects of monetary tightening, in a way that will reduce the underlying trend of inflation and ensure the monetary and financial conditions that will reach the 5 percent target in the medium term. Accordingly, all monetary policy tools will be used with determination. The Committee will take its decisions within a predictable, data-driven, and transparent framework.

The summary of the Monetary Policy Committee meeting will be published within five business days."

News Source: 12punto