Turkish CB keeps interest rates on hold

The Monetary Policy Committee (MPC) keeps the overnight interest rates constant with the borrowing rate at 3.5 percent and the lending rate at 7.75 percent

Turkish CB keeps interest rates on hold

World Bulletin / News Desk

The Monetary Policy Committee of the Turkish Central Bank on Tuesday left unchanged the one-week repo rate,(the policy rate) at 4.5 percent, according to a statement released on the bank's website.

The Monetary Policy Committee (MPC) announced its decision on short-term interest rates, and decided to keep the overnight interest rates the same with the borrowing rate at 3.5 percent and the lending rate at 7.75 percent.

Furthermore, the interest rate on borrowing provided for primary dealers (banks) via repo transactions was recorded at 6.75 percent.

Late liquidity window interest rates (between 4:00 p.m. – 5:00 p.m.) were also kept unchanged with the borrowing rate at 0 percent, and the lending rate at 10.25 percent.

According to the statement of MPC, the recent data suggest that the final domestic demand and exports continue to grow at a moderate pace.

"The present policy framework is contributing to improvement of the current accounts balance. The cautious monetary policy stance, the macro prudential measures and weak capital flows will gradually bring down the loan growth rates to more reasonable levels. Accordingly, gradual decline in the current account deficit excluding gold trade is expected to continue" said the statement.

The bank stated that core inflation indicators are likely to hover above the inflation target of 5 percent for some time due to adjustment of the taxes and the exchange rate volatility observed during recent months. It added that the impact of these developments on pricing behavior is closely monitored by the MPC.

The statement also said “The overnight interbank rates are aimed to be stabilized around 7.5 percent”, adding; “for the days additional monetary tightening seems necessary, the rate would be stabilized around 9 percent”.

Güncelleme Tarihi: 21 Ocak 2014, 17:01