Turkey’s Central Bank Leaves All Interest Rates Unchanged

Turkey’s central bank left all its main interest rates unchanged on Wednesday, citing the need for cautious monetary policy amid volatility in food prices.

The bank kept its main one-week repo rate at 7.50 percent, matching the median estimate in a Bloomberg survey of 26 economists. It also kept its overnight lending and borrowing rates at 10.75 percent and 7.25 percent respectively, according to a statement posted on its website.

Facing government pressure to keep borrowing costs low before elections scheduled for June 7, central bank Governor Erdem Basci has recently ruled out raising interest rates in the immediate future. Inflation outlook doesn’t warrant an additional tightening of monetary policy even as price gains quickened to 7.9 percent in April, compared to the bank’s 5 percent target, Basci said April 30.

The lira was trading 0.4 percent lower at 2.6037 per dollar at 2:04 p.m.

Policy makers lowered the main repo rate by a total of 75 basis points this year.

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