The Monetary Policy Committee of the Central Bank of Turkey has decided to keep the key interest rate unchanged today. The Committee kept the Marginal Funding Rate at 8.5 percent and borrowing rate at 7.25 percent. The one-week repo rate has been kept at 8 percent, whereas the borrowing rate and the lending rate have been maintained at 0 percent and 10 percent respectively.

Recent data show that Turkish economic data slowed in the September quarter, before recording a partial recovery for the fourth quarter. Demand from the EU economies continues to positively contribute to exports, according to the CBT meeting statement. The central bank anticipates the rebound in economic activity to continue at a moderate pace given the supportive measures and incentives provided recently.

According to the Committee, the implementation of the structural reforms might contribute to the possible growth considerably. Meanwhile, the exchange rate movements because of recently increased global uncertainty and the rise in oil prices pose risks on the upside on the inflation outlook. However, the aggregate demand developments restrain these impacts. Developments would be monitored closely to make a better assessment about the net impact of these factors, stated the Committee.

The Committee mentioned that future monetary policy decisions would be conditional on the inflation outlook.  The central bank would be keeping a close watch on inflation expectations, pricing behaviour and other factors impacting inflation and then it will maintain the cautious monetary policy stance.