Turkish central bank holds rates

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Tayyip Erdogan1 Reuters. Turkey's Prime Minister Tayyip Erdogan.

Istanbul - Turkey's central bank on Wednesday kept its key interest rate steady, following warnings from markets that further cuts would be dangerous at a time of high inflation.

The bank after its latest monetary policy meeting left the one week repurchase rate unchanged at 8.25, following a cut of half a percentage point in July.

Prime Minister Recep Tayyip Erdogan had repeatedly pressed the bank to cut rates aggressively but economists have warned this could fuel price pressure, with inflation ticking up to 9.32 percent in July.

The bank in January raised the one-week repurchase rate from 4.5 percent to 10 percent in response to a fall in the value of the lira which threatened a full blown financial crisis.

Erdogan and his allies, concerned about stuttering growth, have pressed for cuts to bring rates back to their January levels. - Sapa-AFP

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