Türkiye cuts policy rate 250 bps as expected

ANKARA

The Central Bank of the Republic of Türkiye on Thursday trimmed the policy rate by 250 basis points, matching market forecasts.

The benchmark one-week repo rate was lowered to 45% from 47.5%.

The bank said the tight monetary policy would remain in place until price stability is achieved through a sustained reduction in inflation.

"Accordingly, the policy rate will be determined in a way to ensure the tightness required by the projected disinflation path taking into account realized and expected inflation, and the underlying trend," it said.

The bank stressed that it would make cautious decisions on a meeting-by-meeting basis, with a primary focus on the inflation outlook.

Türkiye's annual inflation rate in December eased for the seventh consecutive month to 44.38%, the lowest reading since June 2023.

From May 2023 until last March, the bank raised the rate from 8.5% to 50% and then kept the rate constant until its December meeting, when it lowered the rate by 250 basis points to 47.5%.