Türkiye leaves interest rates unchanged at 50%, as expected

By Tuba Ongun

Türkiye's Central Bank on Thursday left the benchmark one-week repo rate unchanged at 50% for the second consecutive meeting, matching with market expectations.

"Considering the lagged effects of the monetary tightening, the (Monetary Policy) Committee decided to keep the policy rate unchanged, but reiterated that it remains highly attentive to inflation risks," the bank said in a statement.

The bank also said it terminated the securities maintenance practice, within the scope of simplifying the macroprudential framework and enhancing the functionality of the market mechanism.

The bank pledged to take additional steps to preserve the macro-financial stability and to support the monetary transmission mechanism thanks to the developments in credit growth and deposits.

The excess liquidity stemming from the surging domestic and foreign demand for Turkish lira financial assets will be sterilized through additional measures, read the statement.

Türkiye's annual inflation rate rose to 69.8% in April from 68.5% in the previous month, according to the country’s statistical authority.

The bank has forecast 38% inflation at the end of this year and 14% for next year.