March 7, 2018 / 11:08 AM / 10 days ago

Turkey central bank to keep policy tight until inflation outlook eases

ISTANBUL, March 7 (Reuters) - Turkey’s central bank said on Wednesday it would keep monetary conditions tight until price pressures moderated significantly, leaving policy unchanged after three consecutive months of inflation cooling from a 14-year peak.

Current elevated inflation and developments in core inflation indicators posed risks to pricing behaviour, the bank said in a statement, adding it would tighten policy further if needed.

It kept all four of its policy rates on hold, as expected.

February inflation stood at 10.26 percent year-on-year, data showed on Monday. Although inflation has gradually eased after hitting 12.98 percent in November - the highest since late 2003 - it remains far above the bank’s target of 5 percent.

The bank has previously used unorthodox moves to tighten policy, creating the perception among market players and other investors that it wants to avoid conventional rate hikes in the face of President Tayyip Erdogan’s often stated opposition to high borrowing costs. (Reporting by Daren Butler Writing by Ezgi Erkoyun Editing by David Dolan and John Stonestreet)

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