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Turkey central bank unchanged interest rate

Turkey’s central bank has kept its one-week repo rate – also known as the policy rate – steady at 14 percent in line with market forecasts.

A comprehensive review of the policy framework is being conducted with the aim of prioritising Turkish lira in all policy tools of the central bank in order to create a foundation for sustainable price stability, the central bank said on Thursday.

“Increase in inflation in the recent period has been driven by distorted pricing behaviour due to unhealthy price formations in the foreign exchange market, supply side factors such as the rise in global food and agricultural commodity prices, supply constraints, and demand developments,” the bank said in a statement.

It came after the bank’s first Monetary Policy Committee meeting this year.

The committee expects the disinflation process to begin in the wake of measures taken for sustainable prices and financial stability, along with “the decline in inflation owing to the base effect”.

The bank underlined that capacity utilization and other leading indicators show that domestic economic activity remains strong, with the help of robust external demand.

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