The Central Bank of the Republic of Turkey (CBRT) announced its second interest rate decision of the year. The Central Bank, which had increased interest rates in 8 meetings since June, left the policy rate steady at 45% in line with expectations.
Central Bank Keeps Interest Rate Steady
The Monetary Policy Committee (MPC) of the Central Bank, following its first meeting chaired by Fatih Karahan, announced the second interest rate decision of the year. With the decision of the MPC, the policy rate for February was kept steady at 45%, in line with expectations. With this decision, the Central Bank has paused after implementing a total interest rate increase of 36.5 points over the last 9 months.
In the previous decision text released by the CBRT, it was stated that the necessary level of monetary tightness had been achieved to ensure disinflation, and it was emphasized that “Considering the delayed effects of monetary tightening, the necessary level of monetary tightness has been reached for the establishment of disinflation and will be maintained as long as necessary.” This move indicated that the Central Bank was acting decisively in the fight against inflation and was entering a ‘wait-and-see’ period while continuing to take necessary steps to ensure economic stability. Indeed, the policy rate decision for February confirms this stance.
The Central Bank followed a tight monetary policy in 2023, starting in June, with consecutive interest rate hikes in July, August, September, October, November, December, and the first month of this year. These steps aimed to achieve economic balance with a total interest rate increase of 36.5 points over the last 9 months.
Bitcoin/TL Situation After Interest Rate Decision
According to CoinMarketCap’s data, Bitcoin/TL was at the level of 1.6 million before the Central Bank’s interest rate decision. After the interest rate decision, it appears that Bitcoin/TL has started to rise against the Turkish lira, drawing strength from the rising U.S. dollar.
While the all-time high for Bitcoin/TL was recorded at 1.616 million on February 21, 2024, market observers and analysts anticipate that this record will soon be refreshed. Particularly, the combination of Bitcoin’s rise against the U.S. dollar and the Turkish lira’s depreciation against the U.S. dollar is fueling this expectation.
