March 16, 2017 / 11:28 AM / 5 months ago

Turkish cenbank says to keep tight monetary stance until inflation outlook improves

ISTANBUL, March 16 (Reuters) - Turkey's central bank said on Thursday it will keep its tight stance in monetary policy until the inflation outlook displays a significant improvement, after cost pressures and food price volatility led to a sharp increase in inflation recently.

In a statement after keeping its one-week repo rate unchanged but raising its late liquidity window rate, the bank said the rise in inflation was expected to continue in the short term and it would deliver further monetary tightening if needed.

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. (Reporting Daren Butler and Humeyra Pamuk; Editing by David Dolan and Toby Chopra)

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