Turkey's Central Bank keeps interest rates steady

Turkey's Central Bank on Thursday kept its one-week repo rate-also known as the policy rate-steady at 19%, in line with market expectations.

After the committee's sixth Monetary Policy Committee meeting this year, the bank said in a statement that "high levels of inflation expectations continue to pose risks to the pricing behavior and inflation outlook."

On the other hand, it added that it is monitoring the decelerating impact of monetary tightening on credit and domestic demand.

Taking this into account, it said its current tight monetary policy stance will be maintained decisively until the significant fall in inflation forecast in its April Inflation Report is achieved.

The bank "will continue to use decisively all available instruments in pursuit of the primary objective of price stability," it added.

In its April report, the bank raised the country's year-end inflation forecast for this year to 12.2%, up from 9.4% in its previous report.

It also hiked the inflation forecast for 2022 to 7.5%, up from 7%, while keeping the 5% target for 2023.

Turkey's annual inflation rate stands at 16.59% in May, down from 17.14% in April, according to the latest data from the Turkish Statistical Institute (TurkStat).