Ankara, Turkey — The Central Bank of the Republic of Turkey (CBRT) has released the summary of its Monetary Policy Committee (MPC) meeting held on July 24, in which it cut the policy rate by 300 basis points. The Bank highlighted that a temporary increase in monthly inflation is expected for July, driven largely by seasonal and one-off factors.
In the meeting summary, the CBRT stated:
“Preliminary indicators suggest that monthly inflation will temporarily rise in July due to month-specific factors. This includes the impact of administered price and tax adjustments, as well as developments in certain high-weight service sub-items where time-based pricing tendencies are prominent. However, the underlying inflation trend is projected to remain moderate.”
Key Takeaways from the July MPC Summary:
• Core inflation may show a slight uptick in goods and services when seasonal effects are excluded.
• The energy group saw notable price increases in July, largely due to:
• Adjustments to residential natural gas tariffs
• Fixed tax updates on fuel and bottled gas
• Inflation expectations and pricing behavior remain a key risk to the disinflation outlook.
• The CBRT is closely monitoring the impact of:
• Geopolitical developments
• Rising global trade protectionism
The Bank reiterated its commitment to closely tracking inflation dynamics and emphasized that temporary increases in July do not alter the medium-term trajectory of gradual disinflation.
The statement comes amid broader economic adjustments in Turkey, where the central bank has begun to loosen monetary policy following a series of rate hikes in previous quarters aimed at curbing high inflation.
Source: Bloomberght/ Prepared by: İlayda Gök