Turkish CB keeps interest rates steady in August
Güncelleme Tarihi:
Turkey's central bank held the benchmark interest rates steady at 16.75 percent as expected on Thursday, a statement issued on the central bank's official website said. (UPDATED)
Turkish central bank had increased interest rates by 1.5 percentage points in the April-July period to fight inflation fueled by rising global oil and food costs.
"Considering the monetary tightening since May, the committee believes that the current level of the policy rate is supportive of disinflation. Yet, prevailing risks regarding the price setting behavior and ongoing global uncertainties require monetary policy to remain cautious and to be more responsive to incoming data," the bank said in a statement.
"Future decisions on policy rates will depend on developments in global markets, external demand, fiscal policy implementation, and other factors affecting the medium term inflation outlook," the statement also said, changing the "possible future rate hike" expression with "future decisions on policy rates" expression from its previous statement in July.
"Recent readings indicate that domestic economic activity has continued to moderate. Ongoing problems in international credit markets and global economy continue to restrain the aggregate demand, while easing domestic uncertainties will support domestic demand," the central bank added.
"Moreover, oil prices have followed a significantly lower course than the levels assumed in the baseline scenario in the July Inflation Report and other commodity prices also displayed a downward course, improving the near-term inflation outlook. Overall, inflation is expected to fall gradually in the forthcoming period," the bank added.
The central bank's decision to keep rates on hold was widely expected by analysts.Â