DECISION OF THE MONETARY POLICY COMMITTEE
Central bank: tcmb | Type: decision | Date: 2008-01-17

No: 2008-01
17 January 2008
DECISION OF THE MONETARY POLICY COMMITTEE
Meeting Date: January 17, 2008
Committee Members
Durmu ş Yılmaz (Governor), Erdem Ba şçı, Burhan Göklemez, M. İbrahim Turhan, Mehmet
Yörüko ğlu.
The Monetary Policy Committee (The Committee) decided to lower the policy
rates as follows:
a) Overnight Interest Rates: Borrowing rate from 15.75 to 15.50 percent , and lending
rate from 20 to 19.50 percent ,
b) Late Liquidity Window Interest Rates: Borrowing ra te applied between 4:00 p.m. –
5:00 p.m. from 11.75 to 11.50 percent , lending rate from 23 to 22.50 percent ,
c) The interest rate on overnight and one-week maturit y borrowing facilities provided for
primary dealers via repo transactions from 19 to 18.50 percent .
Readings on the last quarter of 2007 suggest that the e conomy continued to
grow at a moderate pace. The lagged effects of monetar y tightening and the weakened
global credit conditions restrain domestic demand. Moreov er, the expected slowdown in
global economic activity may lead to a reduction in the contribution of external demand
to the economic growth. Accordingly, aggregate demand co nditions should continue to
support disinflation. In this context, inflation is expe cted to decelerate despite the risks
from food and energy prices.
Drought and energy related supply shocks not only increase d inflation
temporarily but also had short-term adverse effects on t he growth rate. The Committee
underlined that the primary goal of the Central Ban k is to achieve price stability, and
noted that monetary policy remains restrictive even aft er the recent rate cuts. Yet, the
lagged impacts of the recent rate cuts are to be seen. Be sides, the Committee will
closely monitor the second round effects of elevated food and energy prices as well as
developments in incomes policy, on the wage and price set ting behavior. The timing of
further easing will depend on incoming information re garding global liquidity conditions,
external demand, fiscal policy implementation and othe r factors affecting the medium
term inflation outlook.
It should be emphasized that any new data or informat ion related to the inflation
outlook may lead the Committee to revise its stance.
The summary of the Monetary Policy Committee Meeting will be released within
eight working days.