Turkey’s central bank on Thursday lowered its main interest rate by 2.5 percentage points, a larger cut than expected, as inflation showed signs of easing.
The bank had lifted its key rate to 46 percent in April following protests over the jailing of Istanbul Mayor Ekrem İmamoğlu, then lowered it by three points in July.
The monetary policy committee said it reduced the one-week repo auction rate from 43 percent to 40.5 percent, cutting by 250 basis points.
Official data last week showed annual inflation slowed to 32.95 percent in August from 33.52 percent in July, reinforcing expectations of a rate cut.
“While growth exceeded projections in the second quarter, final domestic demand remained weak. Recent data suggest that demand conditions remain disinflationary,” the bank said in a statement, while noting that food and service prices were still adding pressure.
It added that “inflation expectations, pricing behavior, and global developments continue to pose risks to the disinflation process” and pledged to keep a tight policy stance “until price stability is achieved.”