Turkish central bank keeps rates on hold

ANKARA - Agence France-Presse

The central bank, headed by Erdem Başçı, has not changes rates. DHA photo

Turkey’s central bank has kept its key interest rates on hold and pledged to maintain “cautious” monetary policies, as global pressures threaten its economy.

The central bank kept yesterday its key overnight rate, which has become the main rate since currency turbulence earlier in the year, at 7.75 percent.

It also held its one-week repurchasing or repo rate at 4.5 percent and its borrowing rate at 3.5 percent. But the bank said it would maintain “cautious” policies until inflation came into line with its medium-term objectives.

Inflation remains high in Turkey at more than 7.0 percent, although the central bank is forecasting it to drop to 6.8 percent this year and 5.3 percent in 2014. But analysts say Turkey remains vulnerable because a weakening of its export growth. It is also susceptible to the market turmoil caused by the Fed signals that it might begin to taper its monetary stimulus.