Turkish apex bank’s MPC set to meet

The Turkish Central Bank’s Monetary Policy Committee (MPC) is set to meet later this week to make a decision regarding the key interest rate.

The Central Bank has already increased the policy rate, the one-week repo auction rate, by a significant 2,150 basis points since June of this year. In the previous month, they raised the key interest rate by 500 basis points, taking it from 25 percent to 30 percent. It is widely anticipated by most economists that at the upcoming MPC meeting on October 26, the Central Bank will deliver another 500 basis points increase. These measures are aimed at tightening monetary policy and controlling inflation.

The Central Bank’s primary goal is to establish a disinflation course, anchor inflation expectations, and manage pricing behaviour. They have reiterated that the policy rate will be set in a manner that creates the monetary and financial conditions necessary to achieve a decline in the underlying trend of inflation and reach the 5 percent inflation target in the medium term. Notably, the annual inflation rate accelerated from 58.9 percent in August to 61.5 percent in September, with monthly inflation slowing from 9.1 percent to 4.75 percent.

The Central Bank has also emphasised that foreign direct investment and improvements in external financing conditions are on the rise. These are crucial factors for Turkey’s economic stability and growth. Treasury and Finance Minister Mehmet Şimşek has been actively engaging with international investors to promote the Turkish economy. He recently visited London and France, meeting with various business associations and financial institutions to explain Turkey’s economic outlook and its programs.

During these meetings, Şimşek discussed investment opportunities in Turkey and explored ways to increase bilateral trade and mutual investments. France is one of the top countries making investments in Turkey. As part of his efforts to attract foreign investment and support economic development, Şimşek is scheduled to travel to Gulf nations in the coming week. The goal of these visits is to present Turkey’s new economic program and attract long-term investments that will create jobs and add significant value to the country’s economy.