Turkey Keeps Monetary Policy Unchanged in June

In its June meeting, the Monetary Policy Committee of the Central Bank of the Republic of Turkey decided to leave the one-week repo policy rate unchanged at 4.5 percent, following two consecutive cuts. The borrowing rate was kept at 3.5 percent and the lending rate at 6.5 percent.

Excerpt from the statement by the Monetary Policy Committee:

Recent data suggest that domestic and external demand are evolving in line with expectations. Domestic demand follows a healthy recovery while exports slowed down due to weak global economic activity. The current policy framework and the decline in commodity prices limit the impact of the increasing economic activity on the current account deficit.

Recently, capital flows have weakened due to increasing uncertainty regarding the global monetary policies. Yet, loan growth continues to hover above the reference rate. In this regard, the impact of exchange rate movements as well as growth in loans and domestic demand on price behavior will be closely monitored.

On-going uncertainties regarding the global economy and the volatility in capital flows necessitate the monetary policy to remain flexible in both directions. To this end, necessary adjustments will be made in the composition of Turkish lira liquidity provided by the Central Bank. It should be emphasized that any new data or information may lead the Committee to revise its stance.

Turkey Keeps Monetary Policy Unchanged in June

Bank of Turkey | Nuno Fontes | nuno@tradingeconomics.com
6/18/2013 2:26:48 PM