June 15, 2017 / 11:11 AM / a year ago

Turkey cenbank says to stick to tight policy until inflation outlook improves

ISTANBUL, June 15 (Reuters) - Turkey’s central bank said on Thursday it will keep monetary policy tight until the inflation outlook displays a significant improvement, after inflation last month edged off an eight-year high.

In a statement after keeping its main interest rates unchanged, the bank said the current elevated levels of inflation posed risks to pricing behaviour and it would deliver further monetary tightening if needed.

The meeting was the central bank’s second since the April 16 referendum in which Turks narrowly backed constitutional changes to give President Tayyip Erdogan sweeping new powers.

Erdogan, who wants cheap credit to boost growth, has long opposed high interest rates and the central bank has resorted to unorthodox tightening moves, heightening the perception it wants to avoid a conventional rate hike. (Writing by Daren Butler; Editing by David Dolan and Toby Chopra)

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