Turkey keeps repo rate at 8% as data show strong economic activity

By Wendy Van Sickle

Columbus, Ohio, Oct. 26 – The Central Bank of Turkey’s Monetary Policy Committee decided to hold the one-week repo rate at 8% as recently released data indicate economic recovery has gained strength.

Domestic demand conditions keep improving, and demand from European Union economies continues to contribute positively to exports, according to a bank notice.

Recently released data indicate strong economic activity, according to a bank notice. Domestic demand continues to improve, and demand from the European Union economies continues to contribute to exports.

Meanwhile, current elevated levels of inflation and the core inflation outlook continue to pose risks on pricing behavior, the committee said. Accordingly, the committee decided to maintain its tight stance of monetary policy.

“The Central Bank will continue to use all available instruments in pursuit of the price stability objective,” the bank notice states.

“Tight stance in monetary policy will be maintained until inflation outlook displays a significant improvement and becomes consistent with the targets. Inflation expectations, pricing behavior and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered.”

For the overnight interest rates, the marginal funding rate was held at 9¼% and the borrowing rate at 7¼%; and for the late liquidity window interest rates, the borrowing rate is 0% and the lending rate is 12¼%.

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