Cb: Leading Indicators Not Showing Economic Recovery In Q1

- Turkey's leading indicators were not signalising an economic recovery in the first quarter, while high food prices were worsening the inflation outlook, the Central Bank said on Wednesday.

"The leading indicators on economic activity do not signal a recovery in the first quarter. The high levels and volatility of the food prices affecting the consumer inflation negatively. Limited rise has been seen at inflation expectations recently" the Central Bank said in its representation to the bank economists at a meeting organised after the Monetary Policy Committee meeting held on interest rates yesterday.

Central Bank of Turkey's Monetary Policy Committee has decided to keep the policy rate unchanged at 7.50 percent, as expected, yesterday.

"The ongoing cautious monetary policy along with prudent fiscal and macroprudential policies are having a favorable impact on inflation, especially core inflation indicators. Yet, uncertainty in global markets and elevated food prices necessitates maintaining the cautious stance in monetary policy. Accordingly, the Committee decided to keep the interest rates at current levels" the Central Bank said in the represantation.

Future monetary policy decisions would be conditional on the improvements in the inflation outlook, wihile inflation expectations, pricing behavior and other factors that affect inflation would be monitored closely and the cautious monetary policy stance would be maintained, by keeping a flat yield curve, until there is a significant improvement in the inflation outlook.