Turkish Central Bank Ends Hiking Cycle as New Governor Holds Course

By Joshua Kirby

Turkey's central bank held its key policy rate in place, signalling little deviation from its course under new governor Fatih Karahan.

The bank's policy committee decided at its meeting Thursday to keep its benchmark interest rate at 45.0%, ending a cycle of successive hefty rate increases begun last June, as it suggested it would do at last month's meeting. The decision is in line with economists' expectations, according to a poll compiled by FactSet.

At the beginning of February, Governor Hafize Gaye Erkan resigned abruptly after just eight months in office, citing media attacks on her and her family, but her replacement Karahan looks set to stick with the more orthodox policy of high interest rates that started under Erkan's governorship last year.

Rates will be maintained at their current high level until underlying inflation falls markedly and in a sustained manner, the bank said.

"The [policy] committee will determine its policy decisions in a way that will create monetary and financial conditions necessary to ensure a decline in the underlying trend of inflation," it said.

The bank's target is for inflation to come down to 5% in the medium term. It currently stands at close to 65% on year.

Write to Joshua Kirby at [e-mail]; @joshualeokirby

(END) Dow Jones Newswires

02-22-24 0624ET