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Turkey Central Bank Cuts Interest Rate to 11.25%

Turkey's central bank trimmed its main interest rate again on Thursday to 11.25 percent -- the fifth cut in six months.

The one-week repo auction rate was cut by 75 basis points, the bank said, as the inflation outlook "continued to improve".

While inflation rose last month to 11.84 percent from 10.56 percent in the previous month, consumer prices are rising less than they were in the first half of 2019, the bank said.

"Developments in the exchange rate, domestic demand conditions and producer prices have contributed to a mild trend in core inflation indicators," it said in a statement.

A little before the announcement, President Recep Tayyip Erdogan said during a speech that the "necessary steps had been taken to lower interest rates gradually."

Erdogan opposes high interest rates, calling them the "mother and father of all evil". He also subscribes to the unorthodox view that high interest rates causes high inflation.

The cut is smaller than that made in December of two percentage points, suggesting that with a return to monthly rate decisions, the cuts will be more gradual in 2020.

There were eight interest rate decision meetings in 2019.

Source: Agence France Presse


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