Central bank holds interest rate at 19% under new chief

ANKARA

Turkey’s central bank on April 15 held its main interest rate at 19 percent in the first decision since President Recep Tayyip Erdoğan sacked its former governor.

In its fourth Monetary Policy Committee (MPC) meeting under new Governor Şahap Kavcıoğlu, the bank made no changes to its benchmark policy rate - also known as the one-week repo rate- keeping it at 19%.

"Demand and cost factors, supply constraints in some sectors, and high levels of inflation expectations continue to pose risks to the pricing behavior and inflation outlook," the bank said in a statement.

It added that the decelerating impact of the current monetary stance on credit and domestic demand is projected to become more significant in the upcoming period.

In light of this, the committee decided to maintain a tight monetary policy stance by keeping the policy rate unchanged.

The bank also stressed that will continue to decisively use all available instruments to ensure the primary objective of price stability.

"The policy rate will continue to be determined at a level above inflation to maintain a strong disinflationary effect until strong indicators point to a permanent fall in inflation and the medium-term 5% target is reached," it underlined.