Turkish central banks keeps rate at 14% despite inflation

ISTANBUL (AP) — Turkey’s central bank kept its main interest rate unchanged for a fifth month running despite an annual inflation rate of nearly 70%. The bank said Thursday it would keep its policy rate “constant” at 14%. It argued inflation was driven by geopolitical developments and the “temporary effects of pricing formations.” The decision was in line with President Recep Tayyip Erdogan’s opposition to high borrowing costs in a bid to boost growth, investment and exports. The Turkish leader insists that high borrowing costs cause inflation. It’s a position that contradicts established economic thinking.