Central Bank of Turkey Keeps Benchmark Rate at 5.75%

The Central Bank of the Republic of Turkey kept its benchmark 1-week repo rate unchanged at 5.75%.  The Bank cut the lending rate 100bps to 11.50% and the interest rate on borrowing facilities for primary dealers 100bps to 11.00%, and lending rate on late liquidity 100bps to 14.50%.  The Bank said: "Recent data releases confirm that the rebalancing between the domestic and external demand is ongoing as envisaged. Final domestic demand is decelerating while the contribution of net external demand to growth is increasing. Accordingly, the rebalancing process and the improvement in the current account deficit will continue in the forthcoming period."

The Turkish central bank last cut the benchmark rate by 50 basis points when it held an emergency meeting in early August, the bank also cut its benchmark interest rate by 25 basis points to 6.25% in January last year.  The Turkish central bank also adjusted required reserves in late July.  Turkey reported annual consumer price inflation of 10.45% in December, up from 7.7% in October, 6.7% in August, 6.3% in July, 6.2% in June, 7.2% in May, 4.26% in April, and 3.99% in March, and above the Bank's full year inflation target of 5.5%.  

Turkey's economy grew 1.7% in Q3 (1.2% in Q2), placing the Turkish economy up 8.2% on an annual basis (8.8% in Q2).  The Turkish Lira (TRY) has weakened by about 9 percent against the USD over the past year, and last traded around 1.75 against the US dollar.

www.CentralBankNews.info