Turkey Leaves Monetary Policy Unchanged


Turkish central bank decided to maintain its benchmark one-week repo rate at 8.25 percent at its November 20th meeting, saying the current policy stance has a favorable impact on core inflation and it will be maintained until the inflation outlook improves.

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 10.75 percent, and the borrowing rate at 7.5 percent. The late liquidity window borrowing rate was kept at 0 percent and the lending rate was left steady at 12.75 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. Global demand remains weak, while the contribution of domestic demand to growth is increasing. However, the moderate course of consumer loans and the favorable terms of trade may contribute to the improvement in the current account balance.
Macroprudential measures taken at the beginning of the year and the tight monetary policy stance continue to have a favorable impact on the core inflation trend. However, elevated food prices delay the improvement in the inflation outlook. Meanwhile, current levels of commodity prices, in particular declining oil prices, are expected to contribute to disinflation foreseen for the next year. The Committee anticipates that, under the current monetary policy stance, inflation will decline in line with the forecast presented in the Inflation Report throughout 2015.

Inflation expectations, pricing behavior and other factors that affect inflation will be closely monitored and the tight 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
11/20/2014 12:45:56 PM