CB cuts the marginal funding rate by 0.25 points, keeps the policy rate unchanged (2)

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Istanbul, March 24 (DHA) - Central Bank of Turkey's Monetary Policy Committee (MPC) has decided to cut marginal funding rate by 0.25 points but kept the policy rate unchanged.

The Committee kept the policy rate unchanged at 7.50 percent, as the analysits and economists at the banks and brokerage houses expected. On the other hand, the MPC cut the marginal funding rate by 0.25 percentage points to 10.50 percent and left the borrowing rate at 7.25 percent, announced in a statement released by the Central Bank on March 24.

"Recently, global volatility has eased to some extent" read the Central Bank statement. "Moreover, with the use of the policy instruments laid out in the road map published in August 2015 effectively, the need for a wide interest rate corridor has been reduced. In this respect, the Committee decided to take a measured step towards simplification. However, improvement in the underlying core inflation trend remains limited, necessitating the maintenance of a tight liquidity stance" it added.

"Taking into account inflation expectations, pricing behavior and the course of other factors affecting inflation, the tight monetary policy stance will be maintained" the Committee said.