The Turkish central bank is “ready to act” against risks in the current rate-cutting cycle, Governor Fatih Karahan said on February 16 at a conference for emerging market economies in Saudi Arabia.

According to Karahan, the Central Bank of the Republic of Turkey (CBRT) has been gradually cutting rates since December, cutting the discount rate by 250 basis points each in December and January.

But earlier this month, Karahan said that the bank is “not on autopilot” after two consecutive rate cuts and may pause or change the size of the key policy rate changes based on data.

Karakhan said at a conference on February 16 that monetary policy uncertainty in developed economies, particularly the United States, poses risks to emerging market economies, including Turkey.

“This means that central banks will need to act very carefully,” he said. “The risks are there for many reasons… and we are ready to act.”.

According to official data, inflation in Turkey fell to 42.12% year-on-year in January, while monthly inflation rose to 5.03%, exceeding expectations, driven by a minimum wage increase and several New Year’s price adjustments.

“This is not a cycle of easing, but a cycle of interest rate cuts. We continue, keeping the density … We are in no way working on autopilot … We are guided by data and go from meeting to meeting,” the governor said at a press conference in Istanbul earlier this month.

The policy rate, which until December the bank had held at 50% for the previous eight months, is now 45% and, according to a Reuters poll last month, is expected to be cut to 30% by the end of the year.

The bank forecasts inflation to fall to 24% by the end of the year, according to its latest estimates announced earlier this month.