With the decline in inflation, interest rates were reduced in Türkiye for the second time in a row

The Turkish Central Bank decided today, Thursday, to reduce the main interest rate by 250 basis points for the second time in a row, after it declined sharply at the end of last year.

The decision to reduce the interest rate

The Monetary Policy Committee of the Central Bank, headed by Yasar Fateh Qara Khan, Governor of the Bank, decided during today’s meeting to reduce the key interest rate from 47.5% to 45%. The result of the meeting was in line with most analysts’ expectations, after it was reduced last December by 250 basis points.
The last time the central bank reduced interest rates before last December was in February 2023, following a series of interest increases, and the central bank confirmed the continuation of tight monetary policy until consumer prices stabilize through a sustainable decline in inflation.

Inflation declined in Türkiye

Earlier this month, data from the Turkish Statistical Office showed that inflation in Turkey declined last month by a rate that exceeded expectations. The office stated that prices rose in December by an annual rate of 44.4%, compared to 47.1% in the previous month.
Experts polled by Bloomberg News expected prices to rise by 45.2% last month.
On a monthly basis, prices rose in December by 1.03% compared to 2.24% in November, while the average estimate of Bloomberg reached 1.6%.