Turkey’s Central Bank keeps rates unchanged

Turkey’s Central Bank keeps rates unchanged

Turkey’s Central Bank keeps rates unchanged

The Central Bank will keep interest rates on hold, in line with expectations, according to a statement released by the bank on Jan. 18.

The bank left the repo rate at eight percent, the overnight borrowing rate at 7.25 percent and the late liquidity window rate at 12.75 percent.

“Current elevated levels of inflation and inflation expectations continue to pose risks to pricing behavior. Accordingly, the committee has decided to maintain the tight monetary policy stance,” the bank said in the 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 decisively until inflation outlook displays a significant improvement, independent of base effects and temporary factors, and becomes consistent with the targets. Inflation expectations, pricing behavior and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will happen,” it added.

Turkey’s annual inflation stood at 11.92 percent at the end of 2017, sharply above the bank’s official target of 5 percent.

Turkey’s economy has rebounded strongly from a downturn that followed by a 2016 coup attempt, helped by a series of government stimulus measures, and expanded by 11.1 percent year on year in the third quarter, its fastest expansion in six years.

The lira firmed to 3.7920 after the announcement from 3.80 immediately before the decision.

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