(Turkish Central Bank) Keeps Interest Rate at 37 Percent

Istanbul, Sept 10 (KUNA) -- The Central Bank of Turkey decided on Thursday to keep the main interest rate for one-week repurchase operations at 37 percent. In a statement, the central bank said this decision was taken during a meeting of its Monetary Policy Committee, chaired by Governor Sahap Kavcioglu. The committee also decided to maintain the overnight lending rate at 40 percent, while the overnight borrowing rate remained unchanged at 35.5 percent. It added that, despite monthly fluctuations, recent developments in inflation and leading indicators point to a decline in the underlying inflation trend. Emphasizing that data on economic activity, along with the limited pass-through of supply shocks to domestic prices, confirm continued weakness in domestic demand, the bank noted that rising energy prices due to geopolitical developments pose an upside risk to inflation expectations. It stressed that it is closely monitoring the impact of these developments on inflation outlooks through cost, economic activity, and expectations channels. The bank underscored that maintaining a tight monetary policy stance until price stability is achieved will support the disinflationary path through demand, exchange rate, and expectations channels, clarifying that interest rate decisions will be guided by inflation developments, its underlying trend, and expectations, ensuring the maintenance of the required level of monetary tightening. It is worth noting that Turkey’s inflation rate fell to 31.51 percent year-on-year in August, while it stood at 1.84 percent month-on-month. (End) T.A. / M.A.A.