ISTANBUL: Turkiye’s central bank cut its key interest rate by 250 basis points to 42.5% on Thursday, in line with expectations, sustaining an easing cycle that it launched in December as inflation continues to fall.
In a Reuters poll, all respondents forecast the bank would slash its one-week repo rate by 250 basis points for the third straight meeting. The rate is expected to hit 30% by year end, the poll showed.
In December, the central bank cut rates for the first time after an 18-month tightening effort that had reversed years of unorthodox policy and easy money backed by President Tayyip Erdogan, who has supported the U-turn.
The bank made a similar cut in January.
Annual inflation slowed to a lower-than-expected 39.05% in February, down from a peak above 75% last May, in what the central bank believes is a sustained downtrend toward a 5% target over a few more years.
Monthly inflation cooled to 2.27% last month, also less than expected, paving the way for further rate cuts.
To curb years of soaring inflation, the central bank had raised its policy rate by 4,150 basis points since mid-2023 and kept it at 50% for eight months before beginning to ease policy.
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