World Bulletin/News Desk
The Monetary Policy Committee (MPC) of the Turkish Central Bank (CB) pegged the one-week repo rate (the policy rate) at 4.5 percent.
Announcing its decision on short term interest rates on Wednesday, the MPC decided to keep constant the overnight interest rates with the borrowing rate at 3.5 percent and the lending rate at 7.75 percent.
Futhermore, the interest rate on borrowing facilities provided for primary dealers via repo transactions was recorded at 6.75 percent.
Late liquidity window interest rates (between 4:00 p.m. – 5:00 p.m.) were also kept constant to peg the borrowing rate at 0 percent, and the lending rate at 10.25 percent.
Recent data suggests that final domestic demand and exports continue to grow at a moderate pace. The present policy framework is contributing to improvement of the current account balance. The cautious monetary policy stance, the macroprudential measures and weak capital flows will gradually bring down the loan growth rates to more reasonable levels. Accordingly, gradual decline in the current account deficit excluding gold trade is expected to continue.
Inflation is expected to fall further in the forthcoming period. However, core inflation indicators are likely to hover above the inflation target for some time due to the exchange rate volatility observed during recent months. The impact of these developments on pricing behavior is closely monitored. The Committee will maintain the cautious monetary policy stance and continue implementing additional monetary tightening at the appropriate frequency until the medium term inflation outlook is in line with the medium term targets.
Developments regarding price stability and financial stability will be closely monitored and necessary adjustments will continue to be made in the composition of Turkish lira liquidity provided by the Central Bank. Meanwhile, in order to contain the repercussions of uncertainties in global monetary policies on the domestic economy, maintaining the increased predictability of the Turkish lira liquidity policy is deemed important.
Any new data or information may lead the Committee to revise its stance.Last Mod: 23 Ekim 2013, 15:40