Turkey’s central bank leaves interest rates unchanged

Rising inflation and a weakening lira leave little room for rate cut sought by President Erdogan.

Turkey’s central bank kept its benchmark interest rate unchanged for a fourth month on Wednesday, as rising prices and a weakening lira blight the economy’s recovery from pandemic lockdowns. The Monetary Policy Committee held its one-week repo rate at 19% as forecast by all 21 analysts surveyed by Bloomberg. Turkish inflation accelerated faster than all estimates in June due to rising global commodity prices and the easing of coronavirus restrictions, leaving little room for the reduction in borrowing costs President Recep Tayyip Erdogan has sought for July or August. The central bank said it’ll maintain its current monetary stance until a significant drop in price growth, and warned of “possible volatility” in inflation during the summer as the economy reopens.