Turkey: CBRT cuts policy (one-week repo auction) rate to 19.75% from 24%
- CBRT cuts policy rate by more than expected in July.
- CBRT says data suggests a moderate recovery in the economy.
- TRY weakens against major currencies with initial market reaction.

The Central Bank of the Republic of Turkey (CBRT) today announced that it cut the policy rate (one-week repo auction rate) by 425 points to 19.75% from 24% compared to analysts estimate of 21.5%.
With the initial market reaction, the USD/TRY pair gained more than 500 pips and rose to a 2-week high of 5.76. As of writing, the pair was trading near 5.72, adding 0.25% on the day. Below are some key takeaways from the CBRT's policy statement.
"Maintaining a sustained disinflation process is the key for achieving lower sovereign risk, lower long-term interest rates, and stronger economic recovery."
"The extent of the monetary tightness will be determined by considering the indicators of the underlying inflation trend to ensure the continuation of the disinflation process."
"Underlying trend indicators, supply side factors, and import prices lead to an improvement in the inflation outlook."
"Recently released data indicate a moderate recovery in the economic activity."
"The composition of growth is having a positive impact on the external balance."
"Current account balance is expected to maintain its improving trend."
"Uncertainty regarding global economic policies are closely monitored in terms of their impact on both capital flows and international trade."
"Weaker global economic activity has strengthened the possibility that advanced economy central banks will take expansionary monetary policy steps."
"Net exports are expected to contribute to the economic growth and the gradual recovery is likely to continue with the help of the disinflation trend and the partial improvement in financial conditions."
Author

Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

















