Turkey Cuts Policy Interest Rate by 250 Basis Points – Currency Thoughts
Turkey Cuts Policy Interest Rate by 250 Basis Points
January 23, 2025
Officials at the Central bank of Turkey followed up a 250-basis point policy interest rate cut at last year’s final review in December with similar cut today to 45.0%. A peak of 50.0% had been maintained from last March until the initial reduction in December. A released statement acknowledges that CPI inflation ended 2024 at 44.4%, well above the medium-term 5.0% target but projects such falling to 7-8% by the end of this year and reaching the goal in 2026.
The decisiveness regarding tight monetary stance is strengthening the disinflation process through moderation in domestic demand, real appreciation in Turkish lira, and improvement in inflation expectations. Going forward, increased coordination of fiscal policy will also contribute significantly to this process.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Central Bank of Turkey
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