Turkey's central bank holds interest rates at 24 per cent

Jessica Clark
Follow Jessica
Turkish Lira Falls to Record Low
Source: Getty

Turkey has held its interest rates at 24 per cent today after warnings that it was too soon to cut rates.

The central bank’s monetary policy committee left its benchmark one-week repo rate at 24 per cent after it raised it by 11.25 percentage points last year amid a crisis over the lira.

The currency firmed to 5.37 from 5.41 against the dollar following the decision.

Read more: Turkey inflation rate hits 25 per cent as lira takes another hit

Turkey’s inflation rate fell to 20.3 per cent last month following a slow down in the country’s economy. Turkey’s central bank increased interest rates to 24 per cent in September in a bid to slow inflation despite President Tayyip Erdogan’s opposition to interest rate hikes.

“Recently released data shows that rebalancing trends in the economy has become more noticeable. External demand maintains its strength while slowdown in economic activity continues, partly due to tight financial conditions,” the committee said in a statement.

Read more: Turkey inflation rate jumps over 25 per cent to highest level in 15 years

“While developments in import prices and domestic demand conditions have led to some improvement in the inflation outlook, risks on price stability continue to prevail.

“Accordingly, the committee has decided to maintain the tight monetary policy stance until inflation outlook displays a significant improvement.”