Central Bank of Turkey leaves borrowing rate unchanged, lowers overnight lending rate

By Richard Connell

New York, Oct. 22 - The Monetary Policy Committee of the Central Bank of Turkey left its overnight borrowing rate unchanged at 16.75% at its Oct. 22 meeting, according to a press release issued Wednesday.

It cut the overnight lending rate by 50 basis points to 19.75%.

The committee noted that the ongoing problems in the international credit markets and the global economy had produced a significant slowdown in the domestic economy.

The committee pointed out that while inflation is expected to display a temporary rise due to volatile food prices, it is expected to decline gradually in the medium term, in line with inflation forecasts.

The committee concluded that the best course of action was to leave the borrowing rate unchanged, while lowering the lending rate to contain volatility in short-term interest rates.

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