The Turkish Central Bank held deposit interest rates for the 11th consecutive month at its meeting this week.

Despite inflation in September reaching 9.2 percent in September the Central Bank kept interest rates on hold at 7 percent*.

This is now the 11th consecutive month that interest rates have been at this rate.

Retail savers can expect Turkish banks to offer interest rates of around 8.5 Percent (7.2 Percent after tax) for a 31 day notice account. But with inflation at 9.2 Percent returns on cash are now negative in real terms.

The strength of the Lira was largely unaffected by the decision and continues to be a ‘buy’ for many worldwide investors who are concerned about US and European debt levels.

*Rates were previously quoted at 6.5 percent and this is still the real base rate. However, the central bank now refers to its benchmark rate as the ‘repo rate’ anf that is half a percent higher at 7 percent.