Turkey’s Central Bank Leaves All Interest Rates UnchangedOnur Ant
Turkey’s central bank left all its main interest rates unchanged today, saying it will maintain its “tight monetary policy stance” until the inflation outlook improves significantly.
The bank kept its main one-week repo rate at 8.25 percent, matching all estimates in a Bloomberg survey of 18 economists. The bank also left its overnight lending and borrowing rates at 11.25 percent and 7.5 percent respectively, according to a statement posted on its website.
Price gains accelerated last month to hover around twice the bank’s target even as the inflation outlook improved slightly. Concerns about possible interest rate increases in the U.S. weighed on investor appetite for emerging market currencies before the Federal Reserve meeting Dec. 17, sending the lira to a record low against the dollar. Central bank Governor Erdem Basci has said inflation expectations are closely linked to the currency’s value and blames the pace of price gains on the lira’s slide this year.
“The Turkish central bank will continue to remain cautious” with Fed tightening approaching, Erkin Isik, a strategist at Turk Ekonomi Bankasi AS in Istanbul, said in a report before the decision.
The lira was little changed after the decision, trading 0.1 percent weaker at 2.3231 per dollar at 2:04 p.m.