Interest is the same, so is the discourse
The Monetary Policy Committee of the Central Bank, as expected, did not change the interest rate. It kept the one-week repo auction rate, which is the policy rate, at 24 percent at its meeting last week. The one-week repo rate was raised from 17.75 percent to 24 percent at the Monetary Policy Committee meeting on September 13 last year. The committee kept the rate constant in its October and December meetings as well. The committee will hold its next meeting on March 6. In other words, the rate of 24 percent will continue to be implemented until that date.
The committee may of course hold an extraordinary meeting to change the interest rate but it is known that extraordinary meetings are not made to reduce interest but rather to increase them. An interest rate increase is not likely in this period. There are also no extaraordinary conditions that require a reduction in interest. Therefore, the 24 percent weekly repo rate will be applied until March 6.
Emphas s on mprovement n the current account balance
The same sentence was used in both statements following the Monetary Policy Committee’s December meeting as well as last week’s: “The latest data shows that rebalancing in the economy is becoming evident. The slowdown in economic activity continues due to the tightness in financial conditions while foreign demand maintains its power.” A new sentence was added to this statement after last week’s meeting: “The recovery tendency in the current account balance is expected to continue.” That was the only difference from the previous statement.
D d the pol t c ans forget nterest?
Do you notice that politicians have not been talking about interest recently? Does this mean that the focus is on different issues, or does it mean that the cost of keeping the interest low is now understood?
Central Bank to behave n a relaxed manner
Among other issues, it seems that the economic administration realizes that interfering in Central Bank policy has heavy costs. In July of last year, we saw firsthand how leaving the rate untouched when action was needed escalated the exchange rates. For this reason, the Central Bank has been able to behave in a relaxed manner for a while.