The Central Bank of the Republic of Türkiye (CBRT) raised Thursday its benchmark one-week repo rate by another 250 basis points to 45%, widely correlating with analysts' expectations following months of aggressive monetary tightening after a shift to more conventional policymaking.

"The monetary tightness required to establish the disinflation course is achieved and ... this level will be maintained as long as needed," the bank said after its first Monetary Policy Committee (MPC) meeting of the year.

The central bank thus completed its tightening drive and signaled it would keep the current levels "as long as needed" to bring about the desired disinflation.

"The current level of the policy rate will be maintained until there is a significant decline in the underlying trend of monthly inflation and until inflation expectations converge to the projected forecast range," it said.

The CBRT brought its benchmark rate to 45%, marking the eighth interest rate hike since President Recep Tayyip Erdoğan named a new economic administration that reversed yearslong low monetary policy and entered a tightening cycle last June.

The central bank was envisaged to deliver its final 250 basis points hike, according to all respondents in a Reuters poll on Monday, with all of those surveyed expecting no more rate hikes after this month.

Economists participating in an expectations survey conducted by Anadolu Agency (AA) similarly estimated that the bank would raise its policy rate by 2.5 percentage points. As for the year-end policy rate expectations by economists, the median stood at 38.75%.

Taking into account the latest hike, the bank raised the borrowing costs by a combined 3,650 basis points to tame the inflation that was running at nearly 65% in December.

The steps taken by the administration, including the country's first female governor, Hafize Gaye Erkan, a former U.S.-based banker, and Treasury and Finance Minister Mehmet Şimşek were welcomed positively in the markets as part of the fight against inflation, which the central bank expects to cool down in the second half of the year.

A large base of the investor community is reengaging with Türkiye amid the change in macroeconomic policies, and there has been a tide shift, according to Stefan Weiler, the head of JPMorgan's Central & Eastern Europe, Middle East and Africa (CEEMEA) debt capital markets.

"So far, the impact has been strong. I think a large part of the investor community is reengaging with Türkiye," he noted in a recent interview with AA.

"The committee will reassess the stance of monetary policy if notable and persistent risks to inflation outlook emerge," the central bank said, adding that it "continues to simplify and improve the existing micro- and macroprudential framework."

The bank said the existing level of domestic demand, stickiness in services inflation and geopolitical risks were keeping inflation pressures alive but the decline in the underlying trend of monthly inflation has continued.

In December, the bank downshifted tightening to 250 basis points from the previous 500 basis point hikes, and said at the time it would complete the tightening cycle as soon as possible.

Earlier this month, Erkan said to foreign investors that Türkiye is committed to achieving disinflation and is prudently continuing to increase foreign exchange reserves and attract capital inflows.

"Indicators of inflation and the underlying trend of inflation will be closely monitored and the committee will continue to decisively use all the tools at its disposal in line with its main objective of price stability," the bank said.

Stating that the central bank is focusing on monetary tightening and its "liralization strategy" and that the interest rate hike trend expectation is approaching its end, analysts reported that an interest rate cut cycle may start toward the end of the year, in line with the course of inflation, as per an AA report.

Banks Association of Türkiye (TBB) head Alpaslan Çakar on Tuesday was quoted voicing the same opinion and said, "I think Türkiye will follow the main central banks' rate-cut steps and expect a rate-cut cycle to start in the last quarter."

Earlier this week major Asian central banks decided to leave their interest rates unchanged, while the European Central Bank (ECB) was due to announce its decision later on Thursday.