ISTANBUL, July 24 (Xinhua) -- Turkey's central bank on Tuesday decided to keep the policy rate constant, amid high inflation and fluctuations in foreign currency exchange rates.

A press release issued by the bank said the Monetary Policy Committee favored holding the policy rate (one-week repo rate) constant at 17.75 percent.

It said signs of more significant rebalancing trend in the economic activity and declining domestic demand were the main reasons for keeping the rate unchanged.

"Tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant improvement," the release said.

Turkey's inflation scored its highest in 14 years at 15.39 percent in June.

"Factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered," the release noted.

The Turkish lira against the U.S. dollar fell sharply to 4.94 after the decision, marking a loss of over 20 percent since this year.