Turkey’s central bank on Thursday lowered its key interest rate to 43 percent, with the three percentage point cut more than expected by analysts.
The central bank had raised its key interest rate to 46 percent in April after protests over the arrest of Istanbul’s opposition mayor, President Recep Tayyip Erdogan’s main rival, put pressure on the economy and caused the lira to slump against the dollar.
The monetary policy committee “has decided to reduce the policy rate the one-week repo auction rate from 46 percent to 43 percent”, the bank said in a statement.
Annual inflation was at 35.05 percent in June — down from 35.41 percent in May, according to official data.
“The committee will make its policy decisions so as to create the monetary and financial conditions necessary to reach the five percent inflation target in the medium term,” the bank said.
It said the tight monetary policy stance would be maintained until price stability was achieved.
The bank added that the potential effects of geopolitical developments and rising trade protectionism were being “closely monitored”.
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© Agence France-Presse
