Central Bank of Turkey's Monetary Policy Committee to Hold 8 Meetings in 2025
The Central Bank of the Republic of Turkey (CBRT) announced that eight meetings will be held in 2025. The CBRT published the "Monetary Policy Text for 2025." Accordingly, starting from 2025, there will be eight meetings instead of twelve.
Along with the report, the CBRT also announced the meeting dates, and this time the 2025 meeting and report calendar will be published within five business days. In the first section titled "Monetary Policy and Communication," the report provided the following information:
"The greatest contribution of central banks to the increase of social welfare is achieved through ensuring price stability. In this framework, the primary objective of the CBRT is to ensure and sustain price stability. All available tools will continue to be used decisively toward this goal. Financial stability will also be monitored as a supportive element for price stability.
Within the framework of the inflation targeting regime, the inflation target, determined together with the Government, has been maintained at 5%. The uncertainty band, which is a component of the CBRT's accountability obligation, has been defined as a two percentage point range around the target, as in previous years. Monetary policy will be designed to create monetary and financial conditions that will bring inflation toward this target in the medium term.
The indicators expected to guide economic units regarding the future trajectory of inflation are short-term inflation forecasts and, in the medium term, the inflation target. The forecasts announced in the Inflation Report will be used as an intermediate target serving as a reference for inflation expectations.
Comprehensive evaluations regarding inflation developments within the year will be shared with the public through the Inflation Report. If the actual inflation at the end of the year falls outside the uncertainty band, an "Open Letter" will be written to the Government in accordance with the accountability principle.
The one-week repo auction interest rate will continue to be the CBRT's primary policy tool. The stance of monetary policy is determined to ensure that inflation follows a trajectory compatible with the target and continues the disinflation process. In June 2023, the CBRT initiated a strong tightening process to establish disinflation as soon as possible, anchor inflation expectations, and control distortions in pricing behavior, and in this context, it raised the policy rate from 8.5% to 50% by March 2024. Furthermore, on March 1, it decided to change the operational framework by setting the overnight lending and borrowing rates around the one-week repo auction interest rate with a margin of +/- 300 basis points. Starting from March 2024, the CBRT has maintained a tight monetary stance by keeping the policy rate at 50%. To increase the effectiveness of monetary transmission in response to divergences in the expectations of economic units and potential volatility, the CBRT will continue to implement macroprudential policies in 2024. The level of monetary tightness required for the permanent establishment of price stability will be preserved as needed to bring inflation toward the path anticipated in the Inflation Reports and ultimately to the target of 5% in the medium term.
In the event of developments in credit and deposit markets that deviate from expectations, the monetary transmission mechanism will be supported by additional macroprudential steps. Liquidity conditions will be closely monitored considering possible developments, and sterilization tools will continue to be effectively utilized.
Monetary policy decisions will be formulated based on a detailed analysis of prices, inflation expectations, pricing behavior, demand elements that monetary policy can influence, supply-side developments, internal-external balance, savings trends, and developments in all other elements affecting liquidity and price stability, taking into account the lagged effects of decisions.
The three business days prior to the Monetary Policy Committee (MPC) meeting are referred to as the "silent period," during which no external communication regarding monetary policy is made. During this process, units providing input to the decision-making process prepare comprehensive analyses and evaluations for the MPC meeting.
The MPC will hold eight meetings in 2025 within a previously announced calendar. The monetary policy decision and its brief rationale, along with the English translation, will be released on the same day as the meeting at 14:00; the summary of the meeting, containing the MPC's detailed evaluations, will be published on the CBRT website within five business days following the meeting.
The CBRT will continue its data sharing and monetary policy communication in line with the principles of transparency, accountability, and predictability. The primary communication tools for monetary policy are MPC announcements and the Inflation Report. The Inflation Report will be published four times a year. To ensure effective communication of monetary policy practices with the public, the dissemination of the Inflation Report will continue through informative meetings.
Presentations made by the President regarding the CBRT's activities, monetary policy practices, and developments specific to the period will be presented to the Planning and Budget Commission of the Grand National Assembly of Turkey. Presentations and speeches made by the President and Vice Presidents on other platforms will continue to be an important component of the communication policy.
The Financial Stability Report, another significant communication tool of the CBRT, will continue to be published twice a year. To aid in the public interpretation of monthly inflation developments during the period between the announcement of official price statistics and the MPC meeting, the Monthly Price Developments Report will be used as a communication tool.
In addition to these, announcements related to monetary policy, macroprudential frameworks, the management of Turkish lira and foreign currency liquidity are important elements of communication. Communication will continue with the media, investors, academic circles, and the general public. In this context, technical meetings with investors, analysts, and economists will continue. Information will be provided regarding the policy framework and macroeconomic outlook to representatives of the real and financial sectors, domestic and foreign organizations, and all stakeholders of the CBRT's policies. The CBRT will maintain effective communication with international organizations and platforms and other central banks.
Studies published by the CBRT, economic notes, blog posts on the Center's Agenda platform, content published on the "Economy for Everyone" microsite, and various presentations, seminars, and events regarding the CBRT's activities and monetary policy practices will also play an important role in informing the public.
The CBRT will continue to use its existing communication channels effectively, and additionally, social media accounts will be utilized as effective communication channels. Through these accounts, the CBRT communicates its policy decisions and justifications, practices, publications, and institutional news. In this context, content summarizing the CBRT's announcements, reports, and monetary policy tools will be shared with the public via social media.
Moreover, through social media postings, different target audiences will be informed about topics such as economic analyses, statistics, concepts, and events organized by the CBRT.
To enhance the effectiveness of the implemented monetary policy, continue to work in strong coordination with all relevant stakeholders. The CBRT will also share its structural and early warning analyses and findings regarding the causes of inflation that fall outside the scope of monetary policy with the public and relevant institutions.
In order to shape policy decisions based on strong scientific analyses and contribute to sustainable price stability, the "Central Bank of the Republic of Turkey 2025-2027 Research Agenda" has been created and shared with the public. The CBRT's activities to support academic studies will be utilized most efficiently to strengthen the policy design processes.
In line with this established research agenda, research studies will be conducted at both national and global levels. Researchers will be invited to conduct joint studies, workshops, and academic conferences.