Turkish Central Bank holds key rates amid inflation bump
The Turkish Central Bank left its key interest rates on hold for the third straight meeting on Sept. 14, keeping monetary policy tight after annual inflation rose back to double digits last month.
The bank kept its late liquidity window, the highest of the multiple instruments it uses to set policy, at 12.25 percent and the benchmark repo rate at 8 percent.
“Current elevated levels of inflation and developments in core inflation indicators pose risks on the pricing behavior. Accordingly, the committee decided to maintain the tight stance of monetary policy,” the bank said in a statement.
“The Central Bank will continue to use all available instruments in pursuit of the price stability objective. Tight stance in monetary policy will be maintained until inflation outlook displays a significant improvement. Inflation expectations, pricing behavior and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered,” it added.
Turkey’s annual inflation rose more than expected to 10.68 percent in August, data showed on Sept. 5, fueled by rising transport and core prices. Inflation has now been in double digits for six out of eight months this year and remains one of Turkey’s most pressing economic problems.
The bank also kept its overnight lending rate at 9.25 percent and overnight borrowing rate at 7.25 percent, as expected.