* Cenbank keeps rates at 24 pct despite easing inflation
* Investors widely expected back to hold
* Some see rate cut coming in March (Adds analyst quotes, details and background)By Daren Butler and David DolanISTANBUL, Jan 16 (Reuters) - Turkey's central bank left itsbenchmark interest rate unchanged on Wednesday as expected,allaying investor fears that it could loosen policy afterinflation fell from a 15-year high due to a rebound in the lira.The one-week repo rate was held at 24 percent,having been raised 11.25 percentage points last year. Nineteenof 21 economists in a Reuters poll had said they expected therate to be kept steady. Two had forecast a rate cut. There had been speculation the central bank could cut ratesgiven a recent easing in inflation - the rate declined to around20 percent in December, after peaking at a 15-year high of 25.24percent in October. Investors also see the potential forpolitical pressure for lower rates before March local elections."Leaving the rates unchanged was what the markets wanted tosee but the rhetoric is also still about maintaining a hawkishstance," said Kaan Nazli, a senior economist at NeubergerBerman."They have not gone softer, given that inflation has been ona downward trajectory and this is what markets wanted to see onboth forward guidance and the rate decision. Now we are lookingat March, and what will happen then."The lira firmed to 5.3825 against the dollarfollowing the decision, from 5.4169 beforehand. It was at 5.3900at 1111 GMT."While developments in import prices and domestic demandconditions have led to some improvement in the inflationoutlook, risks on price stability continue to prevail," the banksaid in a statement, adding it had decided to stick with a tightpolicy stance until the inflation outlook displayed asignificant improvement.
POLITICAL PRESSUREPresident Tayyip Erdogan, a self-described "enemy ofinterest rates", has repeatedly called for lower interest ratesto keep credit flowing to the construction sector and broadereconomy. His comments have raised concerns about the centralbank's independence, helping spark a sell-off in the lira lastyear that further stoked inflation.The central bank last hiked the repo rate in September tosupport the ailing currency. Following six straight years in thered, the lira has slipped 3 percent year-to-date, making it theworst performing emerging market currency so far in 2019."We still think they'll probably push ahead with a rate cutat the next the meeting in March. The conditionsmacroeconomically seem to be in place and as long as there areno major moves in the lira, they will go ahead and ease policy,"said Jason Tuvey of Capital Economics, one of the two economiststo forecast a rate cut."When it comes to the March meeting as well, campaigning forthe local elections will have already been getting into gear andit is not unlikely that President Erdogan will come out and tryand put pressure on the CBRT too to lower interest rates."Turks go to the polls for local elections on March 31. Aftera decade and a half in power and an economic boom gone sour,Erdogan's AK Party could lose control of some large cities.While Erdogan will continue to hold sweeping executivepowers, a weak showing by the AKP would be a symbolic blow andillustrate how frustration over the economy has hurt apolitician long seen as unbeatable. (Additional reporting by Ali Kucukgocmen in Istanbul and KarinStrohecker in London; Editing by Catherine Evans, Dominic Evans,William Maclean)
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