Turkish central bank met analysts’ forecasts and announced on Thursday a further 250-point cut in its benchmark one-week interest rate, citing as the reason for this new rate cut a decline in core inflation last December that portends a continuation of the fall in Turkey’s CPI through 2025.
Turkish media confirmed the news, noting that this new rate cut – which comes less than a month after the previous one – leaves the benchmark interest rate of the Central Bank of the Republic of Turkey (TCMB) at 45%, down from 47.5% set last December.
In a statement released today by the central bank’s Monetary Policy Committee, the central bank stressed that the TCMB’s policies have succeeded in strengthening the disinflation process, containing domestic demand, revaluing the Turkish lira and improving inflation expectations, adding that an improvement in fiscal policy coordination will contribute significantly to this process.
Turkey’s central bank announced on 26 December its first interest rate cut in almost two years, leaving its benchmark interest rate at 47.5% after holding it at 50% for most of 2024. The move came after closing the year with an inflation rate of 44%, in line with TCMB’s expectations.
While indicators point to a slight increase in prices in January due to rising costs in services, the Turkish Central Bank stresses that core goods inflation – which does not take into account the price of energy, raw materials and fuel – remains relatively low, while domestic demand remains at disinflationary levels. The TCMB’s Monetary Policy Committee – where further rate cuts can be decided – will meet 8 times in 2025, with the next meeting scheduled for 6 March.
VOTE
EDITORIAL TEAM
🧿 About us
.
Edited and reviewed by:
Pablo Gómez is a specialist in Turkey and has been editor-in-chief of Hispanatolia since 2011. He has been analysing current affairs and geopolitics in Turkey and the surrounding region since 2006.
…
📣 Your ADVERTISING on Hispanatolia
.
🤗 HELP US WITH A DONATION:
💗 Paypal
