The Turkish Central Bank announced today its second interest rate cut this year, reducing its benchmark interest rate by 250 basis points, in line with market expectations and following the latest positive inflation data, which in February reached its lowest level in almost two years.
Turkish media sources reported that during the second meeting this year of the Monetary Policy Committee of the Central Bank of the Republic of Turkey (TCMB), the bank decided to reduce its interest rates by 250 basis points in its one-week reference interest rate, which thus went from 45% to 42.5%. At the end of January the Central Bank applied another 250-point reduction, cutting interest rates from 47.5% to 45%.
In a statement, the TCMB emphasised that strict monetary policies will be maintained until price stability is achieved through a sustained reduction in inflation. ‘Consequently, the official interest rate will be determined in such a way as to guarantee the rigour required by the projected disinflation path, taking into account observed and forecast inflation and the underlying trend,’ it said.
‘The monetary policy tools will be used effectively in the event that a significant and persistent deterioration in inflation is anticipated,’ the statement added, insisting that decisions on future rate cuts will be made cautiously, based primarily on inflation forecast.
After increasing interest rates from 8.5% in May 2023 to 50% in March 2024, and keeping them at that level throughout last year, the Turkish Central Bank applied a cut for the first time last December, reducing them by 250 basis points to 47.5%. With the new rate reduction announced today, they now total 750 basis points in three consecutive cuts since the end of last year.
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
