Turkey Central Bank Keeps Key Rates Unchanged

(RTTNews) - Turkey's central bank kept its key rate unchanged on Wednesday as widely expected by economists.

The Monetary Policy Committee held the one-week repo rate unchanged at 8.25 percent. The overnight borrowing rate was maintained at 7.50 percent and the lending rate at 11.25 percent.

Previously, the one-week repo was cut in July and the overnight lending rate was reduced in August.

William Jackson, a senior emerging markets economist at Capital Economics observed that inflation is likely to remain stubbornly high over the coming months despite lower oil prices and the current account gap is set to stay at around 5 percent of GDP even after a decline in energy import bill.

For now, the economist expects the one-week repo rate and the overnight lending rate to remain at their current levels throughout next year despite growing pressure from the government to lower rates. If anything, though, interest rate hikes look more likely than rate cuts, the economist noted.