Turkey's central bank left its key interest rate unchanged for the fifth straight meeting despite surging inflation.
The Monetary Policy Committee of the Central Bank of the Republic of Turkey, governed by Sahap Kavcioglu, decided to retain the one-week repo rate at 14.00 percent. The outcome of the meeting came in line with expectations.
Under pressure from President Tayyip Erdogan, the bank had lowered the rate by 500 basis points since September 2021.
So long as President Erdogan is in power, rate hikes will remain off the cards and it is more likely that policymakers turn to capital controls and more strident lira-isation efforts in the event of further pressure on the lira, Jason Tuvey, an economist at Capital Economics, said.
The MPC expects disinflation process to start on the back of strengthened measures 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, the bank said in the statement.
In April, consumer price inflation had jumped to nearly 70 percent driven by transportation and food prices.
