The bank justified the decision to cut the rate by slowing inflation to 47% and stabilizing prices in the service sector, which has the most problems.
The Turkish Central Bank cut the policy rate for the first time since February 2023 by 2.5% to 47.5% amid slowing inflation. Bloomberg reported this on Thursday, December 26.
The bank justified the decision to cut the rate by slowing inflation to 47% and stabilizing prices in the service sector, which has the most problems.
At the same time, the Central Bank mentioned that this is not yet the beginning of the period of gradual reduction of the charge and it may be raised again depending on the price dynamics.
The report says the Central Bank has scheduled eight meetings to review the rate for 2025.
“The tight monetary policy will be maintained until there is a significant and sustained decline in core monthly inflation and inflation expectations are closer to the forecast range,” the Central Bank said in a statement.
A year and a half ago, President Recep Tayyip Erdogan appointed new central bank leadership, orchestrating a shift to more traditional policies that subsequently led to increased economic confidence, increased international reserves and increasing the country’s credit ratings.
Let’s recall that the United States warned Turkey of “consequences” if the country does not limit the export of American military equipment to Russia.
Source: korrespondent
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