<p>ANKARA, Turkey — Turkey’s central bank on Thursday kept a key interest rate unchanged at 19%, in its first rate decision since the surprise appointment of a new governor that shook confidence in the country’s economy.</p>
<p>President Recep Tayyip Erdogan last month fired his third central bank head in less than two years, raising concerns about a possible return to unconventional monetary policy as the country struggles with persistent inflation. </p>
<p>The Turkish currency plummeted against the dollar, following the appointment of Sahap Kavcioglu who, like Erdogan, has argued for lower interest rates. Typically, higher interest rates shore up a currency and help combat inflation. Erdogan has argued the contrary, that high rates cause inflation.</p>
<p>Kavcioglu however, has since reassured investors by indicating that the bank will follow a tight monetary policy until inflation is brought under control.</p>
<p>“The Monetary Policy Committee has decided to keep the policy rate (one-week repo auction rate) constant at 19%,” the bank said following its closely watched meeting. “The (Central Bank) will continue to use decisively all available instruments in pursuit of the primary objective of price stability.”</p>
<p>Before he was fired last month, Naci Agbal, the previous central bank governor, had raised interest rates by a more-than-expected 2 percentage points, taking the rate to 19%.</p>
