Turkey's central bank holds rate at 50pc

ISTANBUL, Oct 17 (Reuters): Turkey's central bank held interest rates at 50 per cent on Thursday as expected but cautioned that recent data had lifted inflation uncertainty, in a hawkish signal ahead of an expected easing cycle in coming months.

"In September, the underlying trend of inflation posted a slight increase," the bank's policy committee said, adding: "the uncertainty regarding the pace of improvement in inflation has increased in light of incoming data."

Analysts said the message could reinforce the view that the bank will wait until around January to ease monetary policy, after a more than year-long effort to slay years of soaring inflation.

The last time the bank raised its main policy rate was in March, when it hiked by 500 basis points to round off an aggressive tightening cycle that started in June last year.

Since then, it has kept the one-week repo rate on hold. In a change of messaging last month, it began setting the stage for a rate cut by dropping a reference to potential further tightening.

Yet after monthly inflation was higher than expected at nearly 3 per cent in September, a Reuters poll showed analysts expected the bank to wait until December or January to begin its anticipated easing cycle.