ISTANBUL: Turkey’s central bank lowered main interest rate for the first time in a year yesterday despite stubbornly high inflation, in a surprise move weeks after Prime Minister Tayyip Erdogan called for a rate cut.
The bank said “lessening uncertainty” and an improvement in Turkey’s risk premium indicators had prompted it to trim its one-week repo rate by 50 basis points to 9.5 percent. It kept its overnight lending rate at 12 percent and overnight borrowing rate at 8 percent. Erdogan, anxious to maintain a record of strong economic growth ahead of his expected bid in an August presidential election, called last month for a rate cut, saying his party’s victory in local elections had reduced uncertainty and such a move would reassure investors. Reuters
