ANKARA (Reuters) – Turkey’s central bank stands “ready to act” against risks in the current rate-cutting cycle, Turkish Central Bank Governor Fatih Karahan told a conference for emerging market economies in Saudi Arabia on Sunday.
The bank 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 Turkey too.
“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.”
The policy rate, which prior to 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.
(Reporting by Huseyin Hayatsever; Editing by Jan Harvey)
