Turkey’s Central Bank Holds Rates

Turkey’s Central Bank Holds Rates

Thursday, 8 March, 2018 - 12:30
Turkey's Central Bank headquarters in Ankara, Turkey, April 19, 2015. REUTERS/Umit Bektas
Istanbul - Asharq Al-Awsat
Turkey’s Central Bank kept interest rates steady on March 7, saying it would keep policy tight until price pressures eased, signaling its intention to rein in inflation.

Year-on-year inflation has cooled from the 14-year peak of 12.98 percent it reached in November 2017. But at 10.26 percent in February it remains one the main imbalances in Turkey economy, well above the Bank’s target of 5 percent.

Turkish President Recep Tayyip Erdogan, repeatedly, called for reducing credit cost to boost economy, rising concerns of investors that the central bank might be politically leveraged.

The Central Bank last hiked rates in December 2017, its first tightening in eight months.

For a second straight meeting, the Bank left all four of its policy-setting rates unchanged, as predicted by economists who reported to Reuters.

The Bank kept its late liquidity window, the highest of the instruments it uses to set policy, at 12.75 percent. The overnight lending rate stayed at 9.25 percent and the overnight borrowing rate at 7.25 percent.

Turkey's trade deficit grew 54 percent year-on-year in February to $5.75 billion, data from the Customs and Trade Ministry showed on Friday.

Exports increased 9.0 percent to $13.18 billion and imports jumped 19.6 percent to $18.94 billion, the data showed.

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