The Turkish currency has been squeezed on concerns about President Tayyip Erdogan’s influence on the central bank and being later worsened by heightening tensions with the US.
Residents have felt the pinch of the weakening lira, with the cost of fuel and food subsequently rocketing, raising further concern about the risk to banks and the broader economy.
Policymakers are still braced for an economic slowdown amid turbulent months for business.
The Central Bank of the Republic of Turkey said in a statement: ”The Monetary Policy Committee (MPC) has decided to keep the policy rate (one week repo auction rate) constant at 24 percent.
“Recently released data show that the rebalancing trend in the economy has become more noticeable.
“External demand maintains its strength while the slowdown in economic activity continues, partly due to tighter financial conditions.”
The lira gained around 1 percent against the US dollar after the announcement and is now down around 33 percent on the American greenback this year.
This marks an improvement for the Turkish currency which at its worst, was down 40 percent against the US dollar in 2018.
As of 15:30 BST, the Turkish lira was trading at 5.64 against the US dollar.
Turkey saw its growth outlook slashed by the International Monetary Fund (IMF) this month following months of market turmoil.
In a damning forecast, the IMF is predicting Turkey’s gross domestic output will add 3.5 percent this year and only 0.4 percent in 2019.
This figure is down from the IMF’s April forecasts of 4.2 percent and 4 percent.
Pressure on the lira saw inflation rates soar to nearly 25 percent in September – and increase of 17.5 percent – marking the highest levels since President Erdogan came to power 15 years ago.
Ankara has seen duties on aluminium and steel imported from Turkey doubled on orders by US President Donald Trump.
President Erdogan retaliated by slapping US exports with heavy tariffs, with extra duties on products such as cars, alcohol and tobacco.
Source : EXPRESS