Turkey's Central Bank to hold policy rate: Survey

ANKARA (AA) - The Turkish Central Bank is projected to maintain its one-week repo rate -- also known as policy rate -- unchanged at 8 percent, economists said in a survey.

A panel of 14 economists questioned by Anadolu Agency forecast that the bank Thursday will also put the lower limit of the interest rates corridor on hold at 7.25 percent.

Almost half of the economists surveyed expect a rise in the upper limit of the interest rates corridor -- the marginal funding rate -- by 50 to 100 basis points, while the others predicted the bank would hold the rate at 9.25 percent.

Ten of the economists anticipate a 100-basis point rise -- while two economists expect an increase of 50 basis points -- of the Late Liquidity Window lending interest rate. The remaining two say the bank would keep the rate unchanged at 11 percent.

Commenting on the bank's interest rate policy, Ali Kirali, economic research and strategic planning director at Odeabank said: "The most basic factor in the decision process of the Central Bank [...] will be the inflation outlook and the foreign exchange rate.

"The Turkish Central Bank should strengthen its tight stance a bit more in order to stop the upward trend of the inflation rate and [direct] it to a significant decrease in the second half of the year," Kirali added.

The annual inflation rate in Turkey was 10.13 percent in February, according to the Turkish Statistical Institute (TurkStat).

The bank's monetary policy committee is due to meet on Thursday to decide about raising, holding or lowering interest rates.