Turkey Keeps Rates Steady in September


The Central Bank of Turkey held its benchmark one-week repo rate at 8 percent on September 14th as widely expected. Policymakers said the economic recovery has gained strength boosted by domestic and external demand from the EU countries while high inflation continues to pose risks. As a result, a tight stance in monetary policy will be maintained until the inflation outlook improves significantly.

Also, the central bank left its overnight lending rate unchanged at 9.25 percent; its overnight borrowing rate at 7.25 percent and its late liquidity window rate at 12.25 percent.

Statement by the Central Bank of the Republic of Turkey:

Recently released data indicate that the recovery in the economic activity has gained strength. Domestic demand conditions keep improving and demand from the European Union economies continues to contribute positively to exports. The Committee assesses that the implementation of the structural reforms would contribute to the potential growth significantly.

Current elevated levels of inflation and developments in core inflation indicators pose risks on the pricing behavior. Accordingly, the Committee decided to maintain the tight stance of monetary policy.

The Central Bank will continue to use all available instruments in pursuit of the price stability objective. Tight stance in monetary policy will be maintained until inflation outlook displays a significant improvement. Inflation expectations, pricing behavior and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered.

It should be emphasized that any new data or information may lead the Committee to revise its stance.

Central Bank of Turkey |Luisa Carvalho | luisa.carvalho@tradingeconomics.com
9/14/2017 11:29:20 AM