Turkey's central bank leaves overnight borrowing rate at 6½%

By Richard Connell

New York, Aug. 18 - The Monetary Policy Committee of the Central Bank of Turkey left its overnight borrowing rate at 6½% at its meeting on Thursday, according to a news release issued by the bank.

The committee noted that there were signs of a partial slowdown in external demand while domestic demand remained steady, leading to a delay in industrial capacity returning to pre-crisis levels.

The committee also noted that unemployment, though improved, remains at a high level, and warned that risks regarding the global economy were still significant.

The committee forecast that inflation would increase temporarily in the short term before declining during the last quarter of the year and would remain consistent with medium-term inflation targets.

As at previous meetings, the committee reiterated that it would be necessary to keep the interest rate at current levels for "some time" and at low levels for a "long period."

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