Turkey’s central bank held rates steady at 19 percent as expected on Thursday, in its first decision since President Recep Tayyip Erdogan fired the former governor and appointed a new one.
Following its first monetary policy meeting of newly appointed governor Sahap Kavcioglu, the bank issued a statement noting that it maintained a tight stance in the face of lofty inflation expectations, adding rates would remain above inflation until it is clear that price pressure is easing.
The bank will continue to use decisively all available instruments in pursuit of the primary objective of price stability, the statement added.
It acknowledged that risks remained for inflation due to demand, costs and supply issues in certain sectors.
In his first statement after replacing his predecessor Naci Agbal, Kavcioglu stressed that his administration will continue to use monetary policy tools to reduce inflation permanently.
He also explained that reducing inflation rates will positively affect macroeconomic stability through lower risks and permanent improvement in financing costs.
“Reduced inflation will contribute to the development of conditions essential for sustainable growth that will enhance investment, production, exports and employment.”
Kavcioglu affirmed that the bank’s interest-rate-setting meetings will take place according to the previously announced schedule.
The Turkish lira slipped to 8.12 versus the dollar after it rose to 8.03 on Monday’s transactions. Istanbul's main stock index also tumbled to 1.406 points.