Turkey's central bank Tuesday decided to retain its policy interest rate at a record low of 5.75 percent. 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 bank said that the marked slowdown observed in consumption demand in the first quarter has recovered modestly in the second quarter. With exports showing an upward trend, the current account deficit is expected to continue to decline in the coming months.
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.
Turkey's annual inflation accelerated to a faster-than expected 11.14 percent in April from 10.43 percent in March on higher food and fuel prices.
In early May, rating agency Standard & Poor's downgraded the outlook on Turkey's credit ratings to Stable from Positive, as it expects less-buoyant external demand and worsening terms of trade to inhibit economic re-balancing.
by RTT Staff Writer
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