TheTurkish centralbank's monetary policy committee on Sept. 22 the overnight interest rate formarginal funding to 8.25% from 8.5%.
Thecentral bank kept the overnight borrowing rate at 7.25% and maintained theone-week repo rate at 7.5%. The late liquidity window interest rate for lendingwas reduced to 9.75% from 10%, while the late window borrowing rate was kept atzero percent.
Thecommittee said current financial conditions are "tight" as data andindicators regarding the third quarter show a deceleration in economicactivity. Implementation of structural reforms would contribute to potentialgrowth significantly, the committee added.
Thegradual fall in core inflation is partly attributable to the slowdown inaggregate demand. Headline inflation is expected to decline in the short term,the central bank noted, adding that recent tax adjustment in fuel prices andother cost factors limit the improvement in inflation and thus require thecentral bank to maintain a cautious monetary policy stance.