By www.CentralBankNews.info Turkey’s central bank held its benchmark one-week repurchase rate steady at 4.5 percent but raised its overnight lending rate by a sharp 75 basis points and said it would tighten monetary policy further if necessary to support financial stability.
The Central Bank of the Republic of Turkey (CBRT), which has been battling to stem the fall in its lira currency, said recent developments had an adverse affect on inflation, including a surge in unprocessed food prices, rising oil prices and the increased exchange rate volatility may continue to adversely impact inflation in the short term.
“Although the Committee sees these developments as temporary to a large extent, a measured tightening is deemed necessary in order to contain a deterioration in the pricing behaviour,” the central bank said after a meeting of its monetary policy committee.
“A cautious stance will be maintained until the inflation outlook is in line with the medium term targets. In this respect, additional monetary tightening will be implemented when necessary,” it added.
