ANKARA, Jan. 22 (Xinhua) — Türkiye’s central bank cut its benchmark interest rate by 100 basis points to 37 percent on Thursday, continuing a gradual cycle of easing as inflation shows signs of cooling.
The move marks the fifth reduction since last summer, signaling a cautious shift away from the tight monetary policy previously used to curb soaring prices.
In a statement after its policy meeting, the bank’s monetary policy committee pointed to a decline in underlying inflation trends and said domestic demand is currently supporting the disinflation process, though it added that the momentum is moderating.
“While showing signs of improvement, inflation expectations and pricing behavior continue to pose risks to the disinflation process,” the bank said, suggesting that further cuts will remain data-dependent.
The Turkish economy has been grappling with persistent double-digit inflation following a currency crisis in 2018, which significantly weakened the lira and eroded households’ purchasing power.
Recent data suggest the peak may have passed. Annual inflation slowed to 30.89 percent in December, down from 31.07 percent in November, although it remains far below the 75.4 percent peak recorded in May 2024.
Thursday’s 100-basis-point cut follows a more aggressive 150-basis-point reduction in December, indicating the central bank may be slowing the pace of easing to safeguard price stability.
