The Central Bank of the Republic of Türkiye (CBRT) on Thursday kept its one-week repo rate, also known as the policy rate, unchanged at 9%, in line with market expectations during the first meeting of the year.

The lender held the rate unchanged in its last meeting of 2022, after signaling that the rate cut cycle has come to an end.

At its November meeting, the bank cut the rate by 150 basis points to 9%, thus having lowered the key rate by 500 basis points, or 5 percentage points, since August.

"The level and underlying trend of inflation have been improved with the support of the integrated policy approach implemented to strengthen sustainable price stability and financial stability," the bank said in a statement following its first Monetary Policy Committee (MPC) meeting of 2023.

"It is critically important that financial conditions remain supportive for the sustainability of structural gains in supply and investment capacity by preserving the growth momentum in industrial production and the positive trend in employment in a period of increasing uncertainties regarding global growth and further escalation of geopolitical risks," the bank added.

According to the latest data from the Turkish Statistical Institute (TurkStat), Türkiye's annual consumer inflation fell to a six-month low of 64.27% in December, down from 84.39% in November.

While the central bank expects inflation to fall to 22.3% by the end of 2023, it will publish its report for the new year next week.

All economists surveyed by Anadolu Agency (AA) on Monday expected the bank to keep the interest rate constant for this week.

All 22 economists in a Reuters poll had predicted no change to policy.

Türkiye’s new economic program has prioritized rate cuts to boost production, employment and investment with the aim of turning the country’s current account deficits into a surplus.