Turkey Leaves Rates on Hold

Central Bank of Turkey left its benchmark one-week repo rate unchanged at 8.25 percent on October 23rd as inflation rate remains high and lira continues to weaken.
Central Bank of Turkey | Ricardo Martins | ricardo.martins@tradingeconomics.com 10/23/2014 8:05:22 PM
The marginal funding rate was left on hold at 11.25 percent; the interest rate on borrowing facilities provided for primary dealers via repo transactions was kept at 10.75 percent, and the borrowing rate at 7.5 percent. The late liquidity window borrowing rate was kept at 0 percent and the lending rate was left steady at 12.75 percent.

Extract from The Statement by the Central Bank of the Republic of Turkey:

Loan growth continues at reasonable levels in response to the tight monetary policy stance and macroprudential measures. Exports remain supportive of balanced growth in spite of weakening global demand.

Macroprudential measures taken at the beginning of the year and the tight monetary policy stance continue to have a favorable impact on the core inflation trend. However, elevated food prices delay the improvement in the inflation outlook. Meanwhile, current levels of commodity prices, in particular declining oil prices, are expected to contribute to disinflation foreseen for the next year.

Inflation expectations, pricing behavior and other factors that affect inflation will be closely monitored and the tight monetary policy stance will be maintained, by keeping a flat yield curve, until there is a significant improvement in the inflation outlook.

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

Turkey Leaves Rates on Hold