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Turkey central bank hikes liquidity window, but keeps other rates on hold
March 16, 2017 / 11:29 AM / 7 months ago

Turkey central bank hikes liquidity window, but keeps other rates on hold

ISTANBUL, March 16 (Reuters) - Turkey’s central bank raised its late liquidity window rate by 75 basis points on Thursday after a U.S. Federal Reserve hike, but left its main policy rate on hold as concerns about its independence lingered ahead of a referendum next month.

The bank raised the late liquidity window rate to 11.75 percent from 11 percent, less than the 100 basis point hike that had been predicted by 15 of 23 economists polled by Reuters.

However, it left its overnight lending rate at 9.25 percent, contrary to the expectations of a hike from nearly half the economists polled.

It also left its benchmark one-week repo rate at 8 percent. All but one respondent in the poll forecast it would be unchanged.

President Tayyip Erdogan, who wants cheap credit to boost growth, has long opposed high interest rates and the central bank has resorted to unorthodox liquidity moves, heightening the perception it wants to avoid a conventional rate hike.

Turks will vote on April 16 in a referendum on constitutional changes sharply boosting the president’s powers. (Reporting by Daren Butler and Humeyra Pamuk; Editing by David Dolan and Toby Chopra)

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