ISTANBUL, April 25 (Reuters) - Turkey’s central bank left its benchmark interest rate unchanged on Thursday as expected and dropped a previous reference to its readiness to tighten policy further as needed to address inflation.
“Factors affecting inflation will be closely monitored and monetary stance will be determined to keep inflation in line with the targeted path,” the central bank said. It did not repeat a statement from March in which it said, “if needed, further monetary tightening will be delivered.”
The one-week repo rate was held at 24 percent, having been raised 11.25 percentage points last year. In a Reuters poll, all 16 economists had said they expected the rate to be kept steady.
Inflation has eased from a 15-year peak of 25.24 percent in October, though it has edged higher again in recent months, to 19.71 percent in March. The central bank repeated that sagging demand has led to “some improvement” in inflation.
The central bank last hiked the repo rate in September to support the lira in the face of a currency crisis. The economy has since tipped into recession, with unemployment having risen to nearly 15 percent in February.
The lira shed around 30 percent against the dollar last year as investors worried about a diplomatic rift with the United States and central bank independence, given pressure from President Tayyip Erdogan to cut borrowing costs to boost growth.
It has weakened another 10 percent this year on new U.S. strains, challenges to local election results in Istanbul, and a drawdown in reserves that could leave the central bank with little room to cushion another crisis. (Reporting by Daren Butler; Editing by Jonathan Spicer)