The Central Bank of the Republic of Turkey (CBRT) has left its benchmark one-week repo and overnight borrowing rates at 7.5 percent and 7.25 percent, respectively. The bank has also kept the marginal funding rate steady at 10.25 percent. The monetary policy committee of the CBRT held its May meeting on Tuesday in which it touched on the value loss of the Turkish lira against the dollar and said that it restricted the recovery of core inflation. Cautious monetary policy has to be maintained, according to the bank, considering the uncertainties in global markets and fluctuations in energy and food prices. The CBRT has said that tight monetary policy and macro-prudential measures have balanced credit growth rates. The bank also expects the structural reform package announced by the government to push growth higher.Positive developments in international terms of trade and the moderate trend in consumer loans contribute to the improvement of the current account balance. While foreign demand maintains its poor trend, domestic demand contributes to growth on a moderate level. The adopted cautious monetary and fiscal policies as well as macro-prudential measures continue to have a positive impact on inflation indicators, particularly the non-energy and non-food core inflation indicators.In the upcoming period, decisions about monetary policy will depend on the pace of the improvement in the inflation outlook. Inflation expectations, pricing behaviors and other elements that affect inflation will be monitored closely. Until a significant improvement is achieved in the inflation outlook, the cautious stance on the monetary policy will be maintained on condition that the yield curve is kept close to horizontal. It should be underlined that any new data and news to be announced might cause the committee to change its forward-looking policy stance.