By CentralBankNews.info
   Turkey’s central bank kept its benchmark one-week repo rate steady at 7.50 percent, once again defying fresh calls by the president for lower rates, and repeated its guidance that “future monetary policy decisions will be conditional on the inflation outlook.”
    The Central Bank of the Republic of Turkey (CBRT) also confirmed its view from October that a tight monetary policy stance will be maintained in light of inflation expectations, the behavior of prices and “the course of other factors” affecting inflation, a likely reference to how the exchange rate of the lira may be affected by an expected change in U.S. monetary policy.
    On Nov. 15 Turkish President Tayyip Erdogan, whose party has regained its single-party majority, renewed his call for the central bank to cut rates but investors appeared to shrug off any jitters about the central bank’s independence judging from the reaction of the lira.
   The lira has been depreciating since the so-called “taper tantrum” in May 2013 but has been relatively stable since late September and firmed slightly since the Nov. 1 elections, helping ease pressure on inflation.
    The lira was trading at 2.86 to the U.S. dollar today, up from below 3 in late September, but still down 18 percent since the beginning of the year.
    Turkey’s headline inflation rate eased to 7.58 percent in October from 7.95 percent in September and the CBRT said energy prices had a favorable effect on inflation while “cumulative exchange rate movements delay the improvement in the core indicators.”
    Core inflation, which excludes food prices, rose to 9.3 percent in October from 8.7 percent.
    Last month the central bank raised its inflation forecasts in its quarterly inflation report, and the central bank president was quoted as saying that it was not totally incorrect that the CBRT may raise rates if the U.S. Federal Reserve does to avoid capital outflows from investors seeking higher yield.
    The central bank raised its end-2015 inflation forecast to a midpoint of 7.9 percent from 6.9 percent in its previous report.
   For the end of 2016 the CBRT forecast inflation at a midpoint of 6.5 percent, up from 5.5 percent.

   The Central Bank of the Republic of Turkey issued the following statement: