By Bahattin Gonultas
ANKARA (AA) - Turkey’s central bank raised its late liquidity window rate by 0.50 basis points on Thursday after a U.S. Federal Reserve hike, but left its main policy rate on hold.
The bank raised the late liquidity window rate to 12.75 percent from 12.25 percent, less than the 100-basis-point hike which had been predicted by 20 economists polled by Anadolu Agency.
However, it left its overnight lending rate at 9.25 percent and its benchmark one-week repo rate at eight percent unchanged.
“Current elevated levels of inflation and recent developments in cost factors have increased the risks on expectations and the pricing behavior. Accordingly, the Committee decided to tighten the monetary policy stance,” the bank said in a statement.
The bank will continue to use all available instruments in pursuit of the price stability objective, it added.
The Turkish central bank’s move followed the Federal Reserve’s decision to raise interest rates by a quarter of a percentage point in a third hike in 2017.
The late liquidity window rate is the lending facility provided by the Turkish Central Bank for banks to enable them to make use of their excess liquidity at the end of the day.
The lira weakened to 3.88 per dollar after the decision.