Turkey stops cutting rates

The Turkish central bank has stopped cutting rates, holding the overnight borrowing rate at 6.5 per cent and the lending rate at per cent. The bank’s press release said: “Strong base effects would be observed in forthcoming periods… leading to a significant increase in annual inflation, especially in
December, yet core inflation would remain at low levels. The Committee has emphasized that it would be necessary to keep policy rates at low levels for a long period of time.”

Other rates were also held: the late liquidity window interest rates (4pm – 5pm) kept the borrowing rate at 2.5 per cent and the lending rate at 12 per cent, and the interest rate on overnight and one-week maturity borrowing facilities (provided for primary dealers via repo transactions) at 8 per cent.