Turkey’s Central Bank keeps interest rates steady

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Turkey‘s Central Bank on May 6 kept its one-week repo rate – also known as the policy rate – steady at 19 percent, in line with market expectations.

“Taking into account the high levels of inflation and inflation expectations, the current monetary policy stance will be maintained until the significant fall in the April Inflation Report forecast path is achieved,” the bank’s Monetary Policy Committee said in a statement.

Last week, the bank raised its year-end inflation forecast to 12.2 percent for this year. Inflation is expected to fluctuate between 10 percent and 14.4 percent through the end of 2021, it said.

The bank also raised the inflation forecast for 2022 to 7.5 percent, up from 7 percent, while keeping its target of 5 percent for 2023.

“The Central Bank will continue to decisively use all available instruments in pursuit of the primary objective of price stability,” it said.

The statement stressed that the policy rate will be determined at a level above inflation to maintain a strong disinflationary effect until strong indicators point to a permanent fall in inflation and the medium-term 5 percent target is reached.

Hurriyet Daily News

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