Turkey Holds Key Policy Rate at 8% as Expected

The Central Bank of Turkey held its benchmark one-week repo rate at 8 percent on March 7th, as widely expected, saying that the current monetary policy stance will be maintained until there is a significant improvement in the inflation outlook. In February, the country's annual inflation eased to a seven-month low of 10.26 percent, but was still way above the central bank's 5 percent target.
Central Bank of Turkey | Joana Ferreira | joana.ferreira@tradingeconomics.com 3/7/2018 11:11:44 AM
The overnight lending rate was kept at 9.25 percent and the overnight borrowing rate at 7.25 percent. Also, the late liquidity window rate stood at 12.75 percent.

Statement by the Central Bank of the Republic of Turkey:

Recently released data indicate that economic activity maintains its strength. Domestic demand continues to expand and external demand contributes positively to exports.

Current elevated levels of inflation and inflation expectations continue to pose risks on the pricing behavior. Underlying trend indicators display inertia and the core inflation remains elevated. Accordingly, the Committee decided to maintain the tight monetary policy stance.

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 be delivered.

Turkey Holds Key Policy Rate at 8% as Expected