ON THE CUT IN THE CENTRAL BANK’S INTEREST RATES
Central bank: tcmb | Type: decision | Date: 2002-11-11

No: 2002-87
11 November 2002
PRESS RELEASE
ON THE CUT IN THE CENTRAL BANK’S INTEREST RATES
I. GENERAL EVALUATION
The Monetary Policy Report, published on 8 November 2002, and the
press release “October Inflation and Outlook”, published on 11 November
2002 provide the public opinion with detailed information about the
inflation developments and outlook.
A brief summary concerning the inflation developments and outlook is
given below:
(i) The monetary policy of the Central Bank (CBRT) started to focus on
the inflation target for 2003 in August 2002.
(ii) The current trend in inflation and the improvement in expectations
are encouraging. It is clear that the removal of political
uncertainty, the cont inuation of fiscal discipline and structural
reforms will help improve expectations and other factors
determining inflation.
(iii) Despite its optimistic attitude for the next period, the CBRT will
continue to monitor closely the developments in public finance a nd
structural reforms, and the effects of these developments on the
factors determining inflation and expectations.
II. INTEREST RATES OF THE CENTRAL BANK
In the light of the evaluations made by the report and the announcement
mentioned above, we have decide d to cut our short -term interest rates
applicable to Interbank Money Market and Istanbul Stock Exchange Repo-
Reverse Repo Market effective from 11 November 2002 as follows:
a) Overnight Interest Rates : the CBRT borrowing rate is
decreased to 44 percent from 46 percent, and the lending rate
to 51 percent from 53 percent.
b) Other Maturities: the CBRT borrowing rate for one -week is
decreased to 44 percent from 46 percent.
c) Late Liquidity Window Interest Rates: Within the framework
of the Late Liquidity Window Facility, the overnight lending
interest rate declared between 16:00 -16:30 at the Interbank
Money Market has been decreased to 61 percent from 63
percent. The borrowing rate of 5 percent remains the same.
d) In addition, the interes t rates of the borrowing facility granted
to the primary dealer banks with overnight and one -week
maturities in the framework of open market operations is
decreased to 47 from 49.