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Turkish central bank leaves rates on hold in unexpected move
December 20, 2016 / 11:10 AM / a year ago

Turkish central bank leaves rates on hold in unexpected move

ISTANBUL, Dec 20 (Reuters) - Turkey’s central bank kept interest rates on hold on Tuesday, in a move unexpected by analysts as the sliding lira currency took a back seat to President Tayyip Erdogan’s push for cheaper credit.

The bank kept its benchmark one-week repo rate unchanged at 8 percent. Thirteen of 18 economists in a Reuters poll had expected a hike in the repo rate. Eight forecast an increase of 25 basis points and five of 50 points.

It also kept its overnight lending rate at 8.5 percent and its overnight borrowing rate at 7.25 percent.

A majority of economists had also forecast a hike in the overnight lending rate, which is the upper band of the bank’s interest rate corridor.

The lira has lost 17 percent of its value against the dollar this year, hit by both the strengthening greenback and investor concerns about a crackdown by authorities in the aftermath of a failed July coup.

The lira fell again on Monday after the Russian ambassador to Turkey was shot dead as he gave a speech in the capital Ankara. But it then rebounded on relief that Moscow and Ankara struck a unified tone after the Ankara attack. (Writing by Daren Butler; Editing by David Dolan)

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