Central Bank Rate Changes in Turkey, Kazakhstan and Euroland – Currency Thoughts

Central Bank Rate Changes in Turkey, Kazakhstan and Euroland

March 7, 2025

Authorities at the National Bank of Kazakhstan lifted their policy interest rate today by 125 basis points to 16.5%, just 25 basis points south of the past cyclical high of 16.75% from December 2022 until August 2023. The rate had subsequently been cut toa low of 14.25% from June 2024 until a 100-basis point hike in late November. This about-face was triggered by a rise in Kazakhistani consumer price inflation  from 8.3% last September to 8.9% in January and 9.4% last month.

Yesterday, the Central Bank of Turkey’s policy interest rate was cut by an as-expected 250 basis points to 42.5%. That was the third drop of 250 basis points since December. The rate had previously been at 50.0% since an increase in March 2024.  Turkish CPI inflation fell to 39.7% last month from 42.1% in January.

Also as expected yesterday, the European Central Bank’s three interest rates were each lowered 25 basis points, bringing the cutting edge deposit rate to 2.5%, a level sufficiently reduced to elicit a comment from ECB officials that the stance is now meaningfully less restrictive than before this round of cuts than began in September. Officials at the European Central Bank also unveiled updated forecasts that project CPI inflation dropping from 2.3% this year to 1.9% in 2026 and 2.0% in 2025. Core CPI declines from 2.2% this year to 2.0% next year and 1.9% in 2027, and GDP growth is forecast low but improving from 0.9% this year to 1.2% in 2026 and 1.3% in 2027.

Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: Central Bank of Turkey, European Central Bank, National Bank of Kazakhstan

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on Friday, March 7th, 2025 at 9:44 am and is filed under Central Bank Watch.
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