UPDATES WITH COMMENTS FROM CENTRAL BANK; ADDS BACKGROUND INFORMATION
By Muhammed Ali Gurtas
ANKARA (AA) – The Turkish Central Bank on Thursday held its one-week repo rate — also known as the bank's policy rate — constant at 24 percent.
The decision came in a statement from the bank's Monetary Policy Committee meeting.
Thursday's committee meeting is the seventh of eight meetings scheduled for the year. At the last meeting on Sept. 13, the bank hiked its policy rate by 625 base points, up from 17.75 percent to 24 percent.
This year's last Monetary Policy Committee meeting is to be held on Dec. 13.
The bank said the rebalancing trend in the economy became more noticeable.
External demand maintains its strength partly due to tighter financial conditions, while the slowdown in economic activity continues, according to the bank.
Turkey's economy saw an annual growth of 5.2 percent in the second quarter of 2018, while growth rates were 7.3 percent in the January-March period this year.
Pointing significant risks to price stability due to the inflation outlook, the bank said: "Price increases have shown a generalized pattern across subsectors, reflecting the movements in exchange rates."
The U.S. dollar/Turkish lira exchange rate stood at around 5.60 as of 4 p.m. local time (1300GMT) Thursday, while it was nearly 3.75 at the beginning of this year.
"Although weaker domestic demand conditions will partially mitigate the deterioration in the inflation outlook, upside risks on the pricing behavior continue to prevail.
"Accordingly, the committee has decided to maintain the tight monetary policy stance," the bank said, adding, it will continue to use proper tools to achieve price stability objective.
Turkey's annual inflation reached 24.52 percent in September, up from 17.90 in August.
"Inflation expectations, pricing behavior, lagged impact of recent monetary policy decisions, contribution of fiscal policy to rebalancing process, and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered," the bank stated.
Over the past five years, annual inflation saw its lowest level at 6.13 percent in April 2013, while the figure reached its highest level this September.