Turkey keeps rates unchanged; committee expects inflation to increase

By Angela McDaniels

Tacoma, Wash., March 18 - The Central Bank of Turkey's Monetary Policy Committee decided to keep its short-term interest rates constant at its meeting on Tuesday.

For overnight interest rates, the marginal funding rate is 12%, the interest rate on borrowing facilities provided for primary dealers via repo transactions is 11.5%, and the borrowing rate is 8%.

The one-week repo rate is 10%, and late liquidity window interest rates are zero for borrowing and 15% for lending.

The committee assessed that the tightening made at the January interim meeting has contained the adverse impact of upside risks on the medium-term inflation expectations.

Yet, the committee expects inflation to increase until June, partly reflecting base effects.

Against this backdrop, the committee said it will monitor inflation expectations and pricing behavior closely and maintain its tight monetary policy stance until there is a significant improvement in the inflation outlook.

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