Turkish Central Bank says monetary policy to stay tight

The bank's Monetary Policy Committee says economic figures indicate rise in economic activity despite inflation increase

The bank's Monetary Policy Committee says economic figures indicate rise in economic activity despite inflation increase

ANKARA - Turkish monetary policy will remain tight until there are clear signs of recovery in inflation outlook, the Central Bank's Monetary Policy Committee said Thursday.

In a statement published on its website, the committee said that recent economic figures indicated a moderate rise in economic activity despite the increase in inflation. 

The uptick in annual inflation -- which rose in April by one percentage point to 9.38 percent -- was particularly stemmed from an increase in food prices and the delayed effects of depreciation in Turkish lira, according to the statement.

"The Committee will closely monitor inflation expectations, the pricing behavior and other factors that affect inflation and maintain the tight monetary policy stance by keeping the yield curve flat until there is a significant improvement in the inflation outlook," the committee said.

The Central Bank expects inflation to continue increasing until June. On May 22, the bank unexpectedly cut its main interest rate by 50 basis points to 9.5 percent from 10 percent.

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