ISTANBUL, July 24 (Reuters) - Turkey’s central bank said it might be necessary to maintain a tight monetary stance for an extended period, after it kept its policy rate unchanged in the face of a spike in inflation.
“Despite the milder impact of demand conditions on inflation, elevated levels of inflation and inflation expectations continue to pose risks on the pricing behaviour,” the bank said in a statement.
“Accordingly, the Committee assessed that it might be necessary to maintain a tight monetary stance for an extended period.”
Concerns about President Tayyip Erdogan’s influence on monetary policy under a new, executive presidency and doubts over the bank’s ability to rein in double-digit inflation have sparked a sell-off in the lira.
The currency has lost a quarter of its value this year, driving up the prices of everything from food to fuel. Inflation hit a 14-year high of 15.39 percent in June. (Writing by Ezgi Erkoyun; editing by David Dolan, Larry King)