Turkey Leaves Key Rate at 8%

The central bank of Turkey left its key one-week repo rate steady at 8 percent on April 25th 2018, in line with market expectations. The overnight lending rate was also kept at 9.25 percent and the overnight borrowing rate at 7.25 percent. In contrast, the late liquidity window rate was raised by 75bps to 13.5 percent, more than forecasts of a 50bps hike. Policymakers said the economy activity remains strong while high inflation continues to pose risks. As a result, tight monetary policy will be maintained until the inflation outlook improves.
Central Bank of Turkey | Joana Taborda | joana.taborda@tradingeconomics.com 4/25/2018 11:16:07 AM
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. Upside movements in import prices have increased such risks. Accordingly, the Committee decided to implement a measured monetary tightening to support price stability.

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.

It should be emphasized that any new data or information may lead the Committee to revise its stance.

Turkey Leaves Key Rate at 8%