Turkey's Central Bank Keeps Rates On Hold

Turkey's central bank on Tuesday left its key interest rate unchanged as expected by economists.
The benchmark one week repo rate was retained at 5.75 percent. The central bank left the overnight borrowing rate unchanged at 5 percent and the overnight lending rate at 9 percent. The bank unexpectedly hiked its rate by 50 basis points on August 4.

The Monetary Policy Committee expects core inflation to rise in the short-run. But the bank judged that inflation outlook for the end of 2012 is consistent with the 5 percent target.

On the economic front, the central bank forecasts a notable reduction in economic growth in the second half of the year. The committee sees a significant improvement in the current account balance in the forthcoming period.