By Joshua Kirby
Turkey's central bank on Thursday lifted its key interest rate for an eighth straight meeting but signalled it would now end its cycle of increases.
The bank raised the benchmark one-week repo rate to 45% from 42.5%, in line with consensus expectations, per a FactSet poll of economists.
With this hike, the tighter monetary environment brought about by successive interest-rate increases has now been achieved, the bank's monetary policy committee said. Pressures on domestic price inflation remain, the bank said, including stickiness in services inflation, still-high demand, and geopolitical risks. But strength in foreign-exchange reserves and rebalancing of the current-account balance, as well as demand for lira-denominated assets, has helped ease trends in price rises, it said.
"The committee assesses that the monetary tightness required to establish the disinflation course is achieved and that this level will be maintained as long as needed," the bank said.
Price inflation has wreaked havoc on the Turkish economy in recent years but only this year has the central bank, under new Governor Hafize Gaye Erkan, begun to take the usual approach of raising interest rates in response. Inflation rose to just under 65% in the last month of 2023, though there were encouraging signs that underlying price rises are beginning to ease.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
01-25-24 0639ET
