The Central Bank of the Republic of Turkey (CBRT) left the upper band of the interest rate corridor (marginal funding rate) unchanged at 8.25 percent at the Monetary Policy Board (PPK) meeting on Thursday.

The CBRT also left its benchmark one-week repo rate unchanged at 7.5.

In the last seven meetings, the upper band has been cut by a total of 250 basis points.

The bank's decision came after the U.S. dollar reached a new record high against Turkish lira at 3.1055 on Oct.13, following a rally amid discussions about the presidential system referendum and negative economic assessments after the July 15 coup attempt. The dollar's strength against other currencies was another factor leading to its rise against the TL.

In a statement, the CBRT pointed to the slowing economic growth in the third quarter, which was confirmed by the government as the 2016 growth expectation was revised from 4.5 percent to 3.2 percent on Oct. 4.

"Recently released data and indicators regarding the third-quarter display a deceleration in economic activity. Reduced tightness in monetary conditions and the recent macroprudential measures support the overall financial conditions," read a statement on Thursday.

The body also said on Thursday: "The lagged effects of the terms of trade developments and the moderate course of consumer loans limit the widening in the current account balance driven by the decline in tourism revenues.

"Demand from the EU economies continues to contribute positively to exports. With the supportive measures and incentives provided recently, domestic demand is expected to recover starting from the final quarter."

The slowdown in aggregate demand contributed to the gradual fall in core inflation, the bank said. "The Committee assesses that the implementation of the structural reforms would contribute to potential growth significantly."

"Yet, the recent developments in exchange rates and other cost factors restrain the improvement in inflation outlook and thus necessitate the maintenance of a cautious monetary policy stance," it added.

The bank said its future monetary policy decisions would depend on the inflation outlook.

After the central bank decision, the Turkish lira recovered against the U.S. dollar to 3.0516 from 3.0730 lira, up 0.70 percent.