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Turkish Central Bank Holds Policy Rate At Record Low

Turkey's central bank on Wednesday decided to maintain its policy interest rate at a record low of 5.75 percent, amid heightened inflationary pressures. The decision was in line with economists' expectations.

The central bank also kept the overnight borrowing rate unchanged at 5 percent, while the lending rate was retained at 11.5 percent.

The last time the central bank lowered the interest rate was in August 2011, when it slashed the benchmark rate by 50 basis points at an emergency meeting, a week after deciding to keep it unchanged.

The central bank said that consumption demand, which slowed significantly in the first quarter, is expected to recover in the second quarter. With the country's exports steadily maintaining an upward trend, the current account deficit is set to continue to decline, despite high oil prices, it said.

Turkey's annual inflation remained steady at 10.43 percent in March, after slowing in the previous month. The economy expanded at a markedly slower rate of 5.2 year-on-year in the fourth quarter than third quarter's 8.4 percent.

by RTT Staff Writer

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