June 25, 2020 / 11:21 AM / a month ago

Turkish cenbank cites upward inflation drift as it holds rates

ISTANBUL, June 25 (Reuters) - Turkey’s central bank said on Thursday there has been some upward pressure on inflation through the coronavirus pandemic as a reason for its surprise decision to hold interest rates steady.

In a statement after its monetary policy committee meeting, the bank said: a “pandemic-related rise in unit costs have led to some increase in the trends of core inflation indicators,” adding the “economic recovery has started as of May.”

With the coronavirus outbreak hammering domestic demand, tourism and exports, the central bank in April lowered its inflation forecast for end-2020 to 7.4%, from 8.2% earlier.

The forecast was seen as opening the door for the central bank to continue supporting the economy in the face of an historically sharp economic downturn. (Reporting by Ali Kucukgocmen; Editing by Jonathan Spicer)

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