UPDATE - Türkiye leaves interest rates unchanged, matching forecasts

UPDATE WITH MORE DETAILS

By Tuba Ongun

Türkiye's Central Bank on Thursday left the benchmark one-week repo rate unchanged at 50% for the sixth straight meeting, in line with economists' expectations.

The bank reiterated its cautious stance against inflationary risks.

"The tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range," the bank said in a statement.

Türkiye's annual consumer inflation eased to 51.97% in August, the lowest since July 2023.​​​​​​​ On month-on-month basis, the consumer prices index rose 2.47% in August, slowing from July's 3.23%.

Despite no significant change in the underlying inflation trend for August, the overall outlook remained fragile, the bank stated.

It pointed to a gradual slowdown in domestic demand, which has contributed to easing inflationary pressures.

However, core goods inflation saw a slight uptick, although it remains low, and services inflation is expected to improve in the final quarter of the year, the bank noted.

"The Committee noted that inflation expectations and pricing behavior continue to pose risks to the disinflation process," it said.