CBRT: Additional measures will be taken if deemed necessary.

The Central Bank of the Republic of Turkey (CBRT) announced that additional measures would be taken if deemed necessary to ensure the effective functioning of financial markets. On March 20, the CBRT published the summary of its Monetary Policy Committee's interim meeting. The announcement highlighted that, due to recent high volatility in financial markets, Turkey's 5-year credit risk premium (CDS) rose by 38 basis points from its level during the March 6 Monetary Policy Committee meeting, reaching 296 basis points as of March 20. Additionally, the volatility of the Turkish lira's one-month exchange rate increased by 10.3 points to 19%, while the 12-month exchange rate volatility rose by 4.0 points to 21.5%.

The committee convened to assess developments in financial markets, considering the risks these changes pose to the inflation outlook. To support a tight monetary stance, the committee decided to raise the Central Bank's overnight lending rate from 44% to 46%. The one-week repo auction rate was maintained at 42.5%, and the overnight borrowing rate was kept at 41%. Measures were also implemented to limit market volatility, including the initiation of Turkish lira-forward foreign exchange sales to ensure a healthy functioning of the foreign exchange market. The CBRT will continue to utilize all available tools to maintain price stability and will sustain a tight monetary policy stance until a lasting decrease in inflation is achieved.