Turkiye's central bank cuts key interest rate by 3 pps to 43%

The CBRT monetary policy committee also lowered the bank’s overnight lending rate from 49 per cent to 46 per cent and the overnight borrowing rate from 44.5 per cent to 41.5 per cent.

“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 said in a statement.

The decision marked the first rate reduction since April, when the bank hiked rates to 46 per cent in the wake of the controversial arrest of Istanbul mayor Ekrem Imamoglu, which sent the Turkish lira tumbling.

The underlying trend of inflation remained flat (35.05 per cent) in June. Leading indicators suggest a temporary rise in monthly inflation in July due to month-specific factors.

The committee will make its policy decisions so as to create the monetary and financial conditions necessary to reach the 5-per cent inflation target in the medium term.

ALCHEMPro News Desk (DS)