Central Bank of the Republic of Turkey: No Further Interest Rate Changes in September

September 17, 2013

As analysts suspected, Turkey’s Monetary Policy Committee agreed to leave the overnight lending rate at 7.75%, having hiked such by 75 basis points in July and a further 50 bps in August.  The one-week repo rates and overnight borrowing rates of 4.5% and 3.5% were also not changed.  A comparatively brief released statement promised to

maintain the cautious monetary policy stance and implement additional monetary tightening at the appropriate frequency until the medium term inflation outlook is in line with the medium term targets.  Meanwhile, in order to contain the repercussions of uncertainties in global monetary policies on the domestic economy, increasing the predictability of the Turkish lira liquidity policy is deemed important.

Officials observed moderate economic growth, an improving current account deficit, weak capital inflows, elevated lending rates that are headed lower, total inflation that is expected to fall, and core inflation that’s near target.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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