The Central Bank of the Republic of Turkey (CBRT) announced on Wednesday that it lowered its policy (one-week repo) by 100 basis points to 8.75%.
“The economic activity has started to weaken in mid-march due to the effects of the coronavirus pandemic on external trade, tourism and domestic demand,” the CBRT noted in its press release. “Recent monetary and fiscal measures will contribute to financial stability and post-pandemic recovery by supporting the potential output of the economy.”
Market reaction
The USD/TRY pair rose sharply with the initial reaction and was lat seen adding 0.21% on a daily basis at 6.9945.
Additional takeaways
“Monetary stance will be determined by considering the indicators of the underlying inflation trend to ensure the continuation of the disinflation process.”
“Keeping the disinflation process in track with the targeted path requires the continuation of a cautious monetary stance.”
“It is considered that risks on the year-end inflation projection are on the downside.”
“Developments in inflation expectations, domestic demand conditions and producer prices have contributed to a mild trend in core inflation indicators.”
“Inflation outlook is favourable.”
“Continued sharp decline in international commodity prices affects inflation outlook favourably.”
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