Central Bank of the Republic of Turkey

February 23, 2016

The change in Turkish central bank interest rates was announced a year ago tomorrow.  At that time, the one week repo rate and overnight borrowing rate were sliced by 25 basis points to 7.5%, and 7.25%, respectively, while the overnight lending rate was reduced 50 basis points to 10.75%.  Those rate levels will be continue after the latest monetary policy meeting voted not to adjust rates at this time.  Sharp hikes in late January 2014 had put the rates at 10.0%, 8.0%, and 12.0%, and these had been scaled back later in 2014.  A statement released today emphasizes a need to maintain a tight policy stance pending significant improvement in expected inflation, the behavior of price-setting agents, and other factors affecting inflation, which in January was still too high at 9.6%.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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