The Central Bank of the Republic of Turkey (CBRT) kept all benchmark rates unchanged at the Monetary Policy Committee's meeting on Thursday, in line with market expectations.

The bank left benchmark one-week repo rate, overnight borrowing rate (lower band of interest rate corridor) and overnight lending rate (upper band of interest rate corridor) at 8.00, 7.25 and 9.25 percent, respectively.

The late liquidity window (LLW) rate was also kept unchanged at 12.25 percent.

"Recently released data indicate an ongoing recovery in the economic activity. Domestic demand conditions have improved and demand from the European Union economies continues to contribute positively to exports," the bank said.

The bank said economic activity was expected to stay strong thanks to recent supportive measures and incentives.

The implementation of structural reforms would contribute significantly to the growth potential, the bank said.

"Although recent improvements in cost factors and expected partial correction in food prices will contribute to disinflation, current elevated levels of inflation pose risks on the pricing behavior. Accordingly, the Committee decided to maintain the tight stance of monetary policy," the bank said.

Turkey's Central Bank headquarters is seen in Ankara, January 24, 2014. (Reuters Photo)