Turkey Forgoes Rate Hike, Sets Stage for More Stealth Tightening

Turkey raised the upper bound of its interest-rate corridor but unexpectedly left its benchmark on hold on Thursday, risking further volatility in the lira as the central bank sticks with its stealth tightening to contain the currency’s weakness.

While the Monetary Policy Committee left its key one-week repo rate at 10.25%, a move forecast by just two of 27 respondents in a Bloomberg survey, it raised the late liquidity lending rate to 14.75% from 13.25%.