The Turkish Central Bank on April 14 kept its main interest rate unchanged for a fourth month, Trend reports citing Hurriyet Daily News.
In a statement following a Monetary Policy Committee meeting, the bank said it was keeping its policy rate “constant” at 14 percent.
The bank pointed out that rising energy costs resulting from geopolitical developments, temporary effects of pricing formation and strong negative supply shocks have pushed the inflation upward.
“The Committee expects disinflation process to start on the back of measures taken and decisively pursued for sustainable price and financial stability along with the decline in inflation owing to the base effect and the resolution of the ongoing regional conflict. Accordingly, the Committee has decided to keep the policy rate unchanged,” it said in a statement.
Turkey’s annual consumer inflation hit a 20-year high in March at 61.1 percent.
The decision was in line with President Recep Tayyip Erdogan’s opposition to high borrowing costs in a bid to boost growth, investments, employment and exports.
The Central Bank has cut rates by 5 percentage points since September 2021.
In an effort to soften the blow on households, the government has implemented tax cuts on basic goods and has adjusted electricity tariffs.
The bank “will continue to use all available instruments decisively within the framework of liraization strategy until strong indicators point to a permanent fall in inflation and the medium-term 5 percent target is achieved in pursuit of the primary objective of price stability,” it said in the statement.
“Level of capacity utilization and other leading indicators show that domestic economic activity remains strong, with the help of more robust external demand even some regional differences emerge. While share of sustainable components of economic growth increases, risks on current account balance due to energy prices continue,” it added.