Turkey's one-week repo rate remains at 5¾%; Lending rate steady

By Jennifer Chiou

New York, Nov. 23 - The Central Bank of Turkey's Monetary Policy Committee announced that the one-week repo rate will stay at 5¾%.

At its meeting on Wednesday, the bank also kept the borrowing rate at 5% and the lending rate at 12½%. Last month, the latter was raised from 9%.

Also standing still was the interest rate on borrowing facilities provided for primary dealers via repo transactions at 12%. This was increased from 8% in October, according to a bank press release.

As for the late liquidity window, the borrowing rate was unchanged at 0% while lending rate remained at 15½% after having been boosted from 12% in the prior month.

The committee said that recent data releases suggest that the rebalancing between the domestic and external demand is ongoing as predicted.

With the credit growth decelerating to more reasonable levels, the desired increase in private savings has already started to take place, the release noted. Accordingly, the improvement in the current account balance is expected to become more significant in the final months of the year.

The committee noted that inflation will display a rapid increase in the short term due to the base effects from unprocessed food prices.

As previously reported, the one-week repo rate was decreased by 50 bps on Aug. 4 at the committee's interim meeting.

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