Turkish Central Bank: Global uncertainty, high food prices necessitate cautious monetary stance

By bne IntelliNews March 18, 2015

Uncertainty in global markets and elevated food prices necessitates maintaining the cautious stance in monetary policy, accordingly the Monetary Policy Committee decided to keep interest rates at current levels, said the Central Bank on March 18 in a presentation to economists.

On March 17, the Central Bank kept its main rate (one-week repo) steady at 7.50% and left its overnight lending rate and borrowing rate unchanged at 10.75% and 7.25%, respectively.

Future monetary policy decisions will be conditional on the improvements in the inflation outlook, reiterated the Bank in the presentation published on its website, adding that cautious monetary policy stance will be maintained, by keeping a flat yield curve, until there is a significant improvement in the inflation outlook. It argues that the on-going cautious monetary policy along with prudent fiscal and macroprudential policies are having a favourable impact on inflation, especially core inflation indicators.

Here are the other highlights from the March 18 presentation;

* Inflation expectations have edged up slightly

* Loans continue to expand at a reasonable pace due to cautious monetary policy stance

* Leading indicators do not point to a recovery in the economic activity during the first quarter

*Export orders remain weak, while domestic orders show some softening, partly reflecting adverse weather conditions

* Downward trend in trade indicators reflects geopolitical developments, price effects as well as weak domestic and external demand

* Impact of lower oil prices has started to become visible on the current account balances

* Further significant improvement in current account deficit is expected in 2015

* Consumer loans grow at a slower pace than commercial loans contributing to rebalancing process and financial stability

* Non-core liabilities of the financial institutions have been shifting towards longer maturities since the announcement of the RR measures

February CPI by Main Expenditure Groups (%)
  Weights m/m y/y
Headline 100 0.71 7.55
Food and non-alcoholic beverages 24.25 2.59 13.70
Alcoholic beverages and tobacco 4.82 -0.44 3.91
Clothing and footwear 7.38 -6.58 7.40
Housing, utilities 15.79 0.46 7.50
Furnishings, household equipment 7.78 0.23 7.37
Health 2.57 0.82 8.29
Transportation 15.38 1.77 -1.49
Communications 4.38 0.94 3.95
Recreation and culture 3.54 0.58 6.03
Education 2.53 -0.08 7.96
Hotels, cafes and restaurants 6.98 1.06 12.66
Miscellaneous goods and services 4.60 0.59 9.18
Source: tuik      

Related Articles

Vote clears way for April referendum on Turkish executive presidency

Turkey’s parliament on January 21 approved constitutional reforms that, subject to a "yes" vote in a referendum, will pave the way for an executive presidential system that critics argue would ... more

Turkish exporters' association chief dismisses benefits of fast depreciating lira

The fast depreciation that has afflicted the Turkish lira in recent weeks does not bode well for the Turkish economy and the central bank should be more proactive in combating it when necessary, ... more

Turkish central bank releases $500mn of liquidity via new deposit swaps market

The Turkish central bank on January 18 provided around $500mn of liquidity with a maturity of one-week to Turkish lenders at the first auction held under the scope of the newly launched FX ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss