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The Central Bank of the Republic of Turkey (CBRT) announced on Thursday that it left its policy (one-week repo) rate unchanged at 8.25%.

With the initial market reaction, the USD/TRY pair fluctuated wildly. After dropping below 7.2700, USD/TRY rose sharply and was last seen gaining 0.55% on the day at 7.3315.

Key takeaways from the policy statement

“While commercial loans have recently started to normalize, consumer loans have remained strong.”

“Recent upturn in imports, which has resulted from deferred demand as well as pandemic related liquidity and credit policies, is expected to moderate with the phasing out of these policy measures.”

“Tourism revenues declined due to the pandemic, easing of travel restrictions has started to contribute to a partial improvement.”

“Recovery in exports of goods, relatively low levels of commodity prices and the level of the real exchange rate will support the current account balance in the upcoming periods.”

“Economic recovery, which started in May following gradual steps towards normalization, is gaining pace.”