The Central Bank left the one-week repo auction auction rate (policy rate) constant at 19%.
In the statement made by the CBRT, the following statements were made;
“The Monetary Policy Committee (the Committee) has decided to keep the one-week pension auction rate, which is the key rate, at 19%.
The acceleration of immunization around the world, especially in developed countries, is supporting the process of recovery of the global economy. However, economies that have made progress in immunization programs outperform economic activity by easing restrictions.
The rapid recovery in global demand, the upward trend in commodity prices, supply constraints in some sectors and increasing transport costs are driving up producer and consumer prices. international scale. The effects of rising global inflation and inflation expectations on international financial markets remain significant.
Domestic economic activity remains strong. In the second quarter, domestic demand lost momentum due to epidemic restrictions and tighter financial conditions, while foreign demand remained strong. The acceleration of the diffusion of vaccination to the whole of society allows the service and tourism sectors negatively affected by the epidemic to revive and maintain economic activity with a more balanced composition.
Commercial loans are moderately priced. The effects of the macroprudential measures taken will be monitored on the use of personal loans, which has increased recently due to openness and deferred demand. The favorable conditions of external demand and the restrictive monetary policy implemented positively affect the current account balance. The current account surplus is expected for the remainder of the year, as the strong upward trend in exports and the strong acceleration in vaccination boost tourism activities.
In addition to recent increases in import prices and administered / managed prices, demand conditions, supply constraints in some sectors, volatility of inflation during the summer months due to the openness and high levels of inflation expectations continue to pose risks to price behavior and the outlook for inflation.
On the other hand, the slowing effects of monetary tightening on credit and domestic demand are observed. Given the high levels of inflation and inflation expectations, the current stance of monetary policy will be decisively maintained until a significant decrease from the predicted path of the April Inflation Report. is reached. Therefore, the Council decided to keep the key rate constant.
The CBRT will continue to resolutely use all the tools at its disposal in accordance with its primary objective of price stability. Until strong indicators of a permanent decline in inflation occur and the medium-term target of 5% is reached, the policy rate will continue to be set above inflation, now the strong disinflationary effect.
The stability to be achieved in the general price level will positively affect macroeconomic stability and financial stability through the reduction in country risk premia, the initiation of reverse currency substitution, the upward trend in foreign exchange reserves and the decline. permanent financing costs. Thus, a favorable ground will be created for the further growth of investment, production and employment in a healthy and sustainable manner.
The Council will continue to make decisions in a transparent, predictable and data-driven environment.
The summary of the Monetary Policy Committee meeting will be released within five working days.
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