Turkey’s Central Bank keeps main rate unchanged, raises late liquidity rate

ANKARA

The Central Bank has kept its main interest rate unchanged but continued to tighten monetary conditions by raising its late liquidity lending rate by 50 points.  

Facing persistently rising inflation, the Central Bank raised its late liquidity lending rate to 12.25 percent at its Monetary Policy Committee (PPK) meeting on April 26. 

The Central Bank kept its one-week repo, overnight lending and borrowing rates unchanged, in line with forecasts. 

“Cost push pressures and the volatility in food prices in recent months have led to a sharp increase in inflation. Although the recent improvement in the risk appetite contains some of the upside pressures from cost factors, current elevated levels of inflation pose risks on the pricing behavior. Accordingly, the Committee decided to strengthen the monetary tightening in order to contain the deterioration in the inflation outlook,” stated the Bank. 

“The Central Bank will continue to use all available instruments in pursuit of the price stability objective. Tight stance in monetary policy will be maintained until inflation outlook displays a significant improvement. Inflation expectations, pricing behavior and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered,” it added.