ANKARA: Turkey’s central bank refused to bow to government pressure and kept its key interest rates unchanged on Thursday.

In a statement on its website, the bank said the overnight lending rate was being held at 12 per cent, while the borrowing and one-week repo rates were left at 8pc and 10pc.

The announcement came after the bank’s monetary policy committee meeting, which agreed that the tight monetary policy would be maintained until an improvement in the inflation outlook was secured. Prime Minister Recep Tayyip Erdogan said early this month after his Islamic-rooted party scored a sweeping victory in March 30 local polls that the bank should cut interest rates in order to stimulate the economy.

Erdogan, a strong candidate for the presidency in August, has made a turnaround in Turkey’s economic fortunes a keystone of his 11-year rule, pushing the central bank, which is officially independent, for lower rates to boost credit for consumers and businesses.

The bank aggressively raised key rates in January in a bid to halt a steep drop in the Turkish lira.

The January hike came amid an escalating crisis for Erdogan sparked by a vast corruption investigation implicating himself and his inner circle, months after mass anti-government protests.

“The central bank should hold an extraordinary meeting to cut (rates) ...just as they met previously to raise them,” Erdogan said on April 4. “Investors in Turkey will be eager once interest rates are lowered. More investments will be made,” he added.