Turkey: CBRT Leaves Policy Rate Unchanged at 19%

The Central Bank of the Republic of Turkey (CBRT) announced on Thursday that it left its policy (one-week repo) rate unchanged at 19% as expected.

Investor sentiment was hit by news that Turkish President Recep Tayyip Erdogan told President Biden that Turkey would not change its stance on the Russian S-400 missile system, which has been a point of contention between the two countries.

The Turkish lira weakened overnight with a strong rise in US Treasury yields and an uptick in the US Dollar Index. But with keeping the interest rate unchanged, the Turkish Lira may be able to recover some of the losses it recorded last night because the central bank continues its policy of keeping the interest rate stable due to the high levels of inflation.