By Xavier Fontdegloria

Turkey's central bank on Thursday kept its key policy rate unchanged after lowering it in February amid evidence of persisting inflation pressures.

The central bank kept its policy rate stable at 8.5% after cutting it by 50 basis points in February in order to support economic activity in the aftermath of the earthquakes that hit the south of the country.

Economists expected the central bank to cut rates by 25 basis points to 8.25%, according to a consensus forecast provided by FactSet.

Policy makers assessed that the current monetary policy stance is adequate to support the necessary recovery after the earthquake by maintaining price stability and financial stability, the central bank said.

Inflation in Turkey eased to 55.2% in February, but remained at high levels with signs that the cooling trend seen in the last few months is moderating.

"February's inflation data showed that underlying core price pressures are extremely strong, suggesting there is no room for further rate cuts," Capital Economics emerging Europe economist Nicholas Farr said in a note ahead of the central bank's decision.

Still, the central bank said it will prioritize the creation of supportive financial conditions in order to minimize the effects of the earthquake and support the recovery.

"It has become even more important to keep financial conditions supportive to preserve the growth momentum in industrial production and the positive trend in employment," it said.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

March 23, 2023 07:25 ET (11:25 GMT)