Bank of Turkey Leaves Rates on Hold
In its November 19th meeting, the Monetary Policy Committee of the Central Bank of the Republic of Turkey left interest rates unchanged. The Bank hinted tighter monetary policy as inflation will hover above the target line due to weak lira.
11/19/2013 12:21:38 PM
Statement of the Central Bank of Turkey:
Data released since the last meeting suggest that final domestic demand and exports continue to grow at a moderate pace. The present policy framework is contributing to the improvement in the current account balance. The cautious monetary policy stance, recently announced macro prudential measures, and weak capital flows will bring down the loan growth rates to more reasonable levels. Accordingly, moderate decline in the current account deficit excluding gold trade is expected to continue.
Inflation indicators are likely to hover above the inflation target for some time due to the exchange rate volatility observed during the recent months. In order to contain the impact of these developments on the pricing behavior, the Committee decided to strengthen the cautious stance and reduce the volatility of short term money market rates. To this end, one month repo auctions will be terminated, as a result of which interbank money market rates will materialize around 7.75 percent. The Committee stated that the cautious monetary policy stance should be maintained until the inflation outlook is in line with the medium term targets.