Turkey’s central bank cut its key interest rate today to 36% in the first cut in nine months, pointing to a recent slowdown in inflation.
At a policy meeting, the bank “decided to reduce the policy interest rate from 37% to 36%,” it said in a statement.
It was the first cut since January when the bank cut the key rate from 38% to 37%, a rate which it held until today’s meeting.
“Despite monthly fluctuations, recent inflation figures and leading indicators confirm the downward trend,” a bank statement said.
“Data on economic activity and the limited impact of supply shocks on domestic prices suggest that the weak trend in domestic demand continues,” it added.
However, ongoing geopolitical tensions were keeping energy prices high, which could push inflation higher, it warned, saying the effects of such geopolitical developments “are being closely monitored”.
Turkey’s annual inflation rate eased to 29.7% in September from 31.5% in August – the first time it had fallen below 30% in nearly five years, official figures showed.
At the time, Finance Minister Mehmet Simsek said it was at its lowest level since November 2021. “Disinflation is spreading across the board, excluding transportation,” he wrote on X.
The official figures are disputed by the ENAG group of independent economists that publishes its own data, which said its figures showed year-on-year inflation stood at 46.6% in September.
