Turkey's Central Bank Holds key Interest Rate Steady at 50%

Turkey's central bank held its key interest rate steady at 50% on Thursday as expected and said it would remain vigilant on inflation risks ahead of an expected monetary easing cycle in the coming months.

"We will set the level of the interest rate in a way that ensures the monetary tightening required by the expected path of disinflation taking into account realized and expected inflation," the bank said after a meeting of its Monetary Policy Committee.

The Turkish lira rose slightly to 34.5250 against the dollar after the decision to hold, but remained weak on the day.

The central bank last raised interest rates in March, when it increased them by 500 basis points to complete a tight monetary tightening cycle that began in June last year to control runaway inflation.

Turkey's annual inflation rate slowed to 48.6% in October, but was higher than expected.

Although it was down from September's level, the rate remains significantly high.

It is worth noting that Turkey has kept its key interest rate steady at 50% for the past seven months, including today's meeting, ignoring the global trend towards lowering interest rates. This has led to growing discontent among local companies who have said that the cost of doing business has become significantly higher.