In addition to the one-week repo lending rate, the bank also kept overnight borrowing rate unchanged at 1.5 percent and lending rate at 9 percent despite its efforts to cool down the overheating economy.

After a meeting of the committee, the bank said in a statement that recent data regarding economic activity confirmed the bank’s views and that private consumption and investment growth rates were moderate, while the foreign demand outlook remained weak.

 However, the bank said core inflation was expected to increase at a moderate pace over the short term due to impact of rising import prices and base effects.

The bank increased its expectations for the year-end inflation rate to 7.61 percent on Wednesday from 7.54 percent two weeks ago.

Thursday’s statement said recent measures taken by Turkey’s Banking Regulation and Supervision Agency, or BRSA, to curb personal loans would help balance internal and external demand, adding that the gap in the current account would narrow in the last quarter of the year thanks to these policies.

 The bank concluded that it maintained its position considering slowdown in economic activity and recently rising uncertainty in global economy.

“We find the arguments on whether there is overheating in the economy or not somewhat superfluous as the current pace of the current account deficit has exceeded 10 percent of GDP in the first quarter on a saar basis,” Türk Ekonomi Bank said in a note to investors after the bank decision. “Turkey needs to show its determination to bring the current account deficit under control.”

The current policy of the Central Bank is a trustable option, according to Banu Tokalı of Destek Securities. “The signals of slowdown in the domestic demand show that we still need time to observe the latest affects” of the bank’s policy, Tokalı said in a note to investors.

Disagreeing with Tokalı, Özgür Altuğ, the chief economist at BGC Parnters, said, “Despite the bank’s comments we still observe that loan growth has not slowed down at a desired pace and more importantly, the deterioration in the current account deficit, which threatens financial stability, continues at full speed.”

“We also observe that the Central Bank’s 1-week repo funding increased tremendously from 25 billion Turkish Liras to around 60 billion liras,” he said in a Thursday statement. “The Central Bank, along with the BRSA, Treasury and the government might be forced to take additional measures in the coming period.

The U.S. dollar was trading at just above 1.63 liras at 16:45 p.m. on Thursday, up 5 percent against the lira since the start of April