The Turkish central bank on Thursday kept its headline interest rate steady despite persistently high inflation, as Ankara seeks to maintain growth ahead of a referendum next month on expanding the powers of President Recep Tayyip Erdogan.
The bank said in a statement on its website that the overnight lending rate would remain at 9.25 percent. The one-week repurchasing (repo) rate, regarded as the headline rate, remained unchanged at 8.0 percent and the overnight borrowing rate was kept at 7.25 percent.
But the bank said it would raise its late liquidity window lending rate by 75 basis points from 11 percent to 11.75 percent. "The committee decided to strengthen the monetary tightening in order to contain the deterioration in the inflation outlook," the bank said.
Inflation reached double digits in February - the first time in nearly five years - rising by 0.8 percentage point to 10.1 percent.
The bank said the significant rise in inflation was expected to continue in the short term but said EU demand was helping exports. However, the bank noted "weaker" domestic demand.
The move by the bank follows the US Federal Reserve's policy-setting Federal Open Market Committee (FOMC) move to raise the key federal funds rate to a range of 0.75-1.0 percent on Wednesday.
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