The Turkish central bank stands "ready to act" against risks in the current rate-cutting cycle, its governor Fatih Karahan said on Sunday at a conference for emerging market economies in Saudi Arabia.
The Central Bank of the Republic of Türkiye (CBRT) has been gradually cutting rates since December, Karahan said, reducing the policy rate by 250 basis points each in December and January.
But Karahan said earlier this month that the bank is "not on autopilot" after two straight rate cuts and can pause or change the size of policy rate moves based on data.
Karahan told the conference on Sunday that uncertainties over monetary policy in the advanced economies – the United States in particular – are creating risks for emerging market economies, including Türkiye.
"That means that the central banks will need to walk very carefully," he said. "Risks are there for a lot of reasons ... and we stand ready to act."
Inflation in Türkiye eased to 42.12% on an annual basis in January, while monthly inflation surged to 5.03%, exceeding expectations, driven by a minimum wage hike and several new-year price adjustments, according to official data.
"This is not an easing cycle, but an interest rate reduction cycle. We are continuing while maintaining tightness ... We are not on autopilot in any way ... We are data-driven and go from meeting to meeting," the governor told a news conference in Istanbul earlier this month.
The policy rate, which before December the bank had held steady at 50% for the preceding eight months, now stands at 45%, and according to a Reuters poll last month, is expected to be lowered to 30% by the end of the year.
The bank foresees inflation dropping to 24% by year-end, according to its latest estimates, announced earlier this month.
