Economists unanimous in seeing Turkey interest rates on hold

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Turkey’s central bank is expected to keep interest rates on hold at a meeting on Thursday after inflationary pressures mounted, according to three separate surveys.

Economists and financial institutions were unanimous in a predicting that the bank in Ankara will keep rates unchanged at 8.25 percent for a second month, the polls by Reuters, the state-run Anadolu news agency and Bloomberg showed.

The Turkish central bank has slashed the benchmark interest rate from 24 percent over the past year in support of the government’s efforts to stimulate the economy. Rates are now negative when taking account of inflation, which accelerated to 12.6 percent annually in June from 11.4 percent the previous month. Inflation had stood at 8.6 percent in October.

A monthly central bank survey of finance industry professionals and businessmen for July saw year-end inflation of 10.2 percent, almost three percentage points higher than the central bank’s estimate of 7.4 percent. A June survey saw inflation at 9.5 percent. The bank’s medium-term goal is for inflation of 5 percent.

Ahval

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