THE DECISION OF THE MONETARY POLICY COMMITTEE
Central bank: tcmb | Type: decision | Date: 2006-11-23

No: 2006-50
23 November 2006
THE DECISION OF THE MONETARY POLICY COMMITTEE
Meeting Date: 23 November 2006
Committee Members Participated in the Meeting
Durmu ş Yılmaz (Governor), Erdem Ba şçı, Burhan Göklemez, M. İbrahim Turhan,
Mehmet Yörüko ğlu.
The Monetary Policy Committee (Committee) has decided to keep short-
term interest rates (policy rates) unchanged in the Inter-bank Money Market and
the Istanbul Stock Exchange Repo-Reverse Repo Market as follows:
a) Overnight Interest Rates: The overnight borrowing interest rate is 17.50
percent, and the overnight lending interest rate is 22.50 percent.
b) Late Liquidity Window Interest Rates: Within the framework of the Late
Liquidity Window Facility, the overnight borrowing i nterest rate valid between 4:00
p.m. – 4:30 p.m. in the Inter-bank Money Market is 13.50 percent, while the lending
interest rate is 25.50 percent.
c) The interest rate on overnight and one-week maturit y borrowing facilities
provided for primary dealer banks via repo transactions within the framework of
open market transactions is 21.50 percent.
The Committee considers that the recent data is consistent with the outlook
presented in the Inflation Report. The slowdown in th e aggregate demand continues
as expected. While the private sector demand indicators p oint to a significant
slowdown, the foreign demand remains relatively strong . Inflation expectations
continue to improve. However, the factors such as the gap between the medium-term
inflation expectations and the targets, the risks related to the services price inflation
and the uncertainties in the global economy require the monetary policy to maintain its
tight stance. Apart from these issues, the Committee note s, as stated in the “October
Price Developments” report, that weather conditions may have a negative impact on
November inflation through food prices.
In light of these developments, the Committee assesses tha t meeting the
medium-term inflation targets would necessitate the mai ntenance of the cautious
policy stance. The committee closely monitors the lagged e ffects of the monetary
tightening since June. Moreover, the potential impact o f the recent developments in
the incomes policy and the non-interest public sector expe nditures on inflation and
inflation expectations are carefully evaluated. The CB RT will not hesitate to tighten
monetary policy in case of any new developments that would have unfavorable effects
on the medium-term inflation outlook.
It should be emphasized that any new data or informat ion related to inflation
outlook will lead the Committee to reconsider its stance.
A brief summary of the assessments of the Committee will be released within
five working days.