ISTANBUL: Turkey’s central bank kept its policy rate unchanged at 9% for a second month on Thursday, after ending an easing cycle that went against a global tightening trend and as economists expect a slow decline in inflation from the current 64%.

The bank said the level and underlying trend of inflation have improved with support from an integrated policy approach. The slowdown in growth in the fourth quarter due to weakening foreign demand was compensated by relatively strong domestic demand, it said.

Turkish central bank raises securities maintenance ratio to 10%

“It is critically important that financial conditions remain supportive for the sustainability of structural gains in supply and investment capacity by preserving the growth momentum in industrial production,” the central bank’s policy committee said.

Inflation, which was stoked by a currency crisis sparked by a previous easing cycle in 2021, came down to 64.3% in December from a peak of 85.5% in October, largely due to a favourable base effect.