January 21 (SeeNews) - Turkey's central bank said it decided to hold its one-week repo rate at 14% amidst high inflation levels.
"Increase in inflation in the recent period has been driven by distorted pricing behavior due to unhealthy price formations in the foreign exchange market, supply side factors such as the rise in global food and agricultural commodity prices, supply constraints, and demand developments," the central bank said in a statement on Thursday.
"The Monetary Policy Committee expects disinflation process to start on the back of measures taken for sustainable price and financial stability along with the decline in inflation owing to the base effect," the central bank added.
Level of capacity utilisation and other leading indicators show that domestic economic activity remains strong, with the help of robust external demand, the central bank noted.
According to the most recent data published by TurkStat, Turkey's consumer price index rose by 36.08% year-on-year in December, after increasing by an annual 21.31% in November.
The central bank cut its policy rate to 14% from 15% last month.