Türkiye’s central bank on Thursday reduced its key interest rate by three percentage points to 43 percent, marking a return to the path of monetary easing. This decision represents the first rate cut since April, when the bank raised rates to 46 percent.
“The tight monetary policy stance, which will be maintained until price stability is achieved, will support the disinflation process through moderation in domestic demand, real appreciation in Turkish lira, and improvement in inflation expectations,” the central bank stated in a release accompanying the decision.
Read more: Türkiye central bank unexpectedly hikes interest rate to 46 percent
The central bank surprised markets on April 17 when it elevated its one-week repurchase rate from 42.5 percent to 46 percent in a significant 350-basis-point increase that concluded the easing cycle initiated in December of the previous year. This week’s reduction took many analysts by surprise, with some suggesting that the pace of easing may likely decelerate moving forward.
Annual inflation was recorded at 35.05 percent in June, a decrease from 35.41 percent in May, according to official data.
