By Tuba Sahin

ANKARA

Turkey’s Central Bank kept all key interest rates on hold Thursday, in line with market expectations.

The bank left its policy rate known as the one-week repo rate at 8 percent, the overnight lending rate at 9.25 percent, and the overnight borrowing rate at 7.25 percent, it said in a statement.

"Recently released data indicate an ongoing recovery in the economic activity. Domestic demand conditions have improved and demand from the European Union economies continues to contribute positively to exports," the bank said.

The bank said economic activity was expected to stay strong thanks to recent supportive measures and incentives.

The implementation of structural reforms would contribute significantly to the growth potential, the bank said.

"Although recent improvements in cost factors and expected partial correction in food prices will contribute to disinflation, current elevated levels of inflation pose risks on the pricing behavior. Accordingly, the Committee decided to maintain the tight stance of monetary policy," the bank said.