Turkey's central bank on Wednesday decided to keep its main interest rates unchanged as economic growth picked up and inflation eased further. The decision was in line with economists' expectations.

The one-week repo rate, which is the main policy rate, was maintained at 4.5 percent at today's meeting, and the overnight lending rate was kept unchanged at 7.75 percent. The bank also retained its borrowing rate at 3.5 percent.

The overnight lending rate is the upper end of the interest-rate corridor and the borrowing rate is the lower end.

The central bank said that its cautious monetary policy stance, the macro-prudential measures undertaken and weak capital flows will gradually bring down the loan growth rates to more reasonable levels.

Headline inflation is expected to fall further in the forthcoming period, while core inflation indicators are likely to hover above the inflation target for some time due to the exchange rate volatility observed during the recent months, the bank said.

Turkey's consumer price inflation weakened to a four-month low of 7.88 percent in September from 8.17 percent in August.

The economy expanded at a faster annual rate of 4.4 percent in the June quarter than 2.9 percent in the first quarter, helped mainly by a marked pick up in private consumption.

RTTNews