The Turkish central bank kept its key policy rate unchanged at 37% on Thursday, holding steady for a third straight meeting as it monitors the inflation impact of the Iran war.
The Central Bank of the Republic of Türkiye (CBRT) also cited that the underlying trend of inflation "decreased slightly in May," while also suggesting that the first quarter data points "to a slowdown in economic activity and leading indicators suggest a continued weak course in domestic demand."
"The underlying trend of inflation, which increased in April due in part to higher energy prices, following its rise in the first months of the year, decreased slightly in May," the bank said following its closely watched Monetary Policy Committee (MPC) meeting.
However, the bank warned that energy prices "remain volatile and elevated," amid geopolitical developments and the resulting uncertainties.
Oil and gas prices have surged significantly since the start of the Iran conflict, with Brent crude briefly hitting peaks of nearly $120 a barrel. Following easing in recent weeks, the prices have spiked again in recent days amid the renewed risk of attacks between the U.S. and Iran.
