Turkish Central Bank keeps interest rate unchanged at 14%

ISTANBUL

Türkiye's Central Bank on Thursday kept its interest rate unchanged at 14%, it announced in an official statement.

The bank vowed to "continue to use all available instruments decisively" in its strategy of "liraization" 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 stressed that the increase in the inflation rate stemmed from high energy costs due to geopolitical developments and strong supply shocks.

The bank's Monetary Policy Committee, expects the "disinflation process to start on the back of measures taken and decisively implemented for strengthening sustainable price and financial stability along with the resolution of the ongoing regional conflict," it highlighted.

The annual inflation rate was 76.82% in June.

Noting that escalating geopolitical risks continued to impact global economic activity, the Central Bank said: "Global growth forecasts for the upcoming period are being revised downwards and the likelihood of a recession has increased."

Touching on domestic macroeconomic stability, the bank underlined that general price stability would have positive effects on the country's risk premium, foreign exchange reserves, and financing costs.

"This would create a viable foundation for investment, production and employment to continue growing in a healthy and sustainable way," it added.