Turkish Central Bank holds rate unchanged

Turkish Central Bank holds rate unchanged

Turkey’s Central Bank on Wednesday kept its interest rate policy constant at 24 percent. “Recently released data show that rebalancing trend in the economy has continued. External demand maintains its relative strength while economic activity displays a slow pace, partly due to tight financial conditions. Current account balance is expected to maintain its improving trend,” the bank said in a statement regarding the decision. According to the bank, developments in domestic demand conditions and the tight monetary policy support disinflation. “In order to contain the risks to the pricing behavior and to reinforce the disinflation process, the Committee has decided to maintain the tight monetary policy stance,” it said. “The Central Bank will continue to use all available instruments in pursuit of the price stability objective. Factors affecting inflation will be closely monitored and, monetary stance will be determined to keep inflation in line with the targeted path.” The statement added that any new data or information may lead the Committee to revise its stance.

The lira started the day weak against the dollar hours before the policy rate decision. The parity — rising to 5.82 during the day — is moving around 5.79 after the decision.