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Turkey Central Bank Leaves Rates Unchanged

The Turkish central bank left its key interest rate unchanged on Thursday following a massive hike in September.

The Monetary Policy Committee, led by Governor Murat Cetinkaya, held the one-week repo auction rate unchanged at 24 percent, in line with economists' expectations.

In September, the rate was raised from 17.75 percent despite strong pressure from the government to reduce them.

The TCMB said that recent data suggest a more noticeable rebalancing trend in the economy. External demand maintains its strength, while the slowdown in economic activity continues, partly due to tighter financial conditions, the bank noted.

Turkey's consumer confidence deteriorated for a third straight month to its lowest level in nearly a decade during October as inflation rocketed to a 15-year high of 24.52 percent in the previous month.

Citing significant risks to price stability, the TCMB said upside risks on the pricing behavior continue to prevail, although weaker domestic demand conditions will partially mitigate the deterioration in the inflation outlook.

"Tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant improvement," the bank said.

"Inflation expectations, pricing behavior, lagged impact of recent monetary policy decisions, contribution of fiscal policy to rebalancing process, and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered."

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