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2025-07-31 19:18:10
[Turkish Central Bank's First Statement After Rate Cut: July Inflation May See a Temporary Spike, But Core Trend Remains Positive?] ⑴ The minutes of the Turkish Central Bank's Monetary Policy Committee meeting, released Thursday, indicated that leading indicators suggest a possible temporary increase in monthly inflation in July. ⑵ This increase was primarily attributed to the influence of month-specific factors. ⑶ However, the Turkish Central Bank also emphasized that, despite short-term fluctuations, the underlying inflation process is ongoing and the downward trend in inflation is strengthening. ⑷ The central bank reiterated that it will determine the policy interest rate based on realized and expected inflation data and their underlying trends. ⑸ The minutes noted that July's monthly consumer inflation was influenced by administered prices, tax adjustments, and developments in the services sector. ⑹ The minutes, released following the Turkish Central Bank's 300 basis point rate cut last week, demonstrate the central bank's steadfastness in its accommodative policy path. ⑺ The central bank stated that recent data suggest that the disinflationary effect of demand conditions has strengthened. ⑻ Although high-frequency data show that imports of consumer goods, excluding jewelry, remain high, they declined month-on-month in July. ⑼ Overall, the Central Bank of Türkiye believes that even though inflation rose briefly in July, the overall disinflation process has not changed, and it will continue to strive to ensure that the degree of monetary policy tightening is in line with the expected downward inflation path in the future.
