site.btaTurkish Central Bank Lowers Key Interest Rate by 3 Points

The Central Bank of Turkiye announced Thursday lowering the policy rate (the one-week repo auction rate) by 3 percentage points, from 46% to 43%. It has also lowered the Central Bank overnight lending rate from 49% 46 percent and the overnight borrowing rate from 44.5% to 41.5%.

Although inflation remained steady in June, projections indicate a potential increase due to geopolitical developments and global trade trends.

"Potential effects of the geopolitical developments and the rising trade protectionism on the disinflation process are closely monitored. Inflation expectations and pricing behavior continue to pose risks to the disinflation process," the Bank said in a press release.

"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," it went on to say. 

Previously, in April, the Turkish central bank raised the key interest rate by 3.5 percentage points, bringing it to 46%.