Turkey Delivers Smallest Rate Cut Yet as Lira Storm Builds

Turkey’s central bank cut interest rates again, delivering the smallest decrease of its seven-month easing cycle but still risking a backlash as investor tolerance of lower borrowing costs starts to wane.

Looking past market unease, Governor Murat Uysal is pushing Turkey’s inflation-adjusted rates further below zero at a time price pressures are intensifying. The Monetary Policy Committee reduced its key rate for a sixth straight time on Wednesday to 10.75% from 11.25%. While most analysts surveyed by Bloomberg predicted a cut, a sizable minority saw no change.