By Nihad Ahmed

The Turkish central bank on Thursday opted to keep its benchmark rate constant at 14% for the sixth consecutive month despite a continued surge in inflationary pressures.

Turkey's annual rate of inflation registered its highest level in more than 23 years in May, rising to 73.5% from 70.0% in April, marking its twelfth consecutive rise.

Higher energy and commodity prices as a result of the war in Ukraine and a large minimum wage hike at the start of the year as well as the lira's sharp falls in late 2021 have underpinned the surge in inflation.

Nonetheless, rate increases are unlikely to be in the cards as policy makers continue to pursue a "new economic model" characterized by a weak lira and low interest rates.

The bank said in its statement that "to create an institutional basis for sustainable price stability, the comprehensive review of the policy framework continues with the aim of encouraging permanent and strengthened liraization in all policy tools of the CBRT."

Write to Nihad Ahmed at nihad.ahmed@wsj.com

(END) Dow Jones Newswires

June 23, 2022 07:27 ET (11:27 GMT)