Central Bank of Turkey Maintains Policy, Repo 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 also held the lending rate at 11.50% and the interest rate on borrowing facilities for primary dealers at 11.00%, and lending rate on late liquidity at 14.50%.  The Bank said: "Inflation developments are in line with the path projected in the January Inflation Report. Yet, the Central Bank has implemented a new round of additional monetary tightening in order to eliminate the impact of recent cost developments on inflation expectations. Factors affecting inflation will be closely monitored in the forthcoming period and additional monetary tightening will be repeated, when necessary."

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 15 percent against the USD over the past year, and last traded around 1.79 against the US dollar.

www.CentralBankNews.info