Turkey Leaves Monetary Policy Unchanged



Turkish central bank left its benchmark one-week repo rate on hold at 7.5 percent on March 17th of 2015 following last month's 25 bps cut.

The marginal funding rate was left on hold at 11.25 percent; the interest rate on borrowing facilities provided for primary dealers via repo transactions was kept at 10.25 percent, and the borrowing rate at 7.25 percent. 

Statement by the Central Bank of the Republic of Turkey:

Loan growth continues at reasonable levels in response to the tight monetary policy stance and macroprudential measures. The favorable developments in the terms of trade and the moderate course of consumer loans contribute to the improvement in the current account balance. External demand remains weak, while domestic demand contributes to growth moderately. The Committee assesses that the implementation of the announced structural reforms would contribute to the potential growth significantly.

The ongoing cautious monetary policy along with prudent fiscal and macroprudential policies are having a favorable impact on inflation, especially inflation excluding energy and food (core inflation indicators). Yet, uncertainty in global markets and elevated food prices necessitates maintaining the cautious stance in monetary policy. Accordingly, the Committee decided to keep the interest rates at current levels.

Future monetary policy decisions will be conditional on the improvements in the inflation outlook. Inflation expectations, pricing behavior and other factors that affect inflation will be monitored closely and the cautious monetary policy stance will be maintained, by keeping a flat yield curve, until there is a significant improvement in the inflation outlook.

It should be emphasized that any new data or information may lead the Committee to revise its stance.

Turkey Leaves Monetary Policy Unchanged


Central Bank of Turkey | Carolina Cunha | carolina.cunha@tradingeconomics.com
3/17/2015 1:04:48 PM