ISTANBUL, July 23 Reuters Turkey39;s central bank held its policy rate steady at 50 on Tuesday as expected and repeated it remains highly attentive to inflation risks, even as it expects disinflation to gain strength after a welcome turnaround last month.

The central bank last raised interest rates in March, by 500 basis points, and has since held steady while vowing to tighten policy more if it predicts the inflation outlook will worsen, a hawkish pledge it repeated on Tuesday.

Most analysts expect rate cuts to begin before year end, though some expect the central bank will wait longer.

Starting to see results from a yearlong tightening drive, the bank said the underlying monthly inflation trend showed a notable decline in June, though added that it could rise temporarily this month due to oneoff factors.

The decisiveness regarding tight monetary stance will bring down the underlying trend of monthly inflation through moderation in domestic demand, real appreciation in Turkish lira, and improvement in inflation expectations, its monetary policy committee said.

As a result, the disinflation process will gain strength.

Since June last year, the bank has raised its policy rate by a total 4,150 basis points in a tightening cycle that reversed years of monetary stimulus supported by President Tayyip Erdogan to boost economic growth.

Turkey39;s annual inflation rate began what is expected to be a sustained fall in June, dipping to 71.6. Officials and analysts predict…