Central Banks

Shock Rate Cuts Nearing End in Turkey After Biggest Move Yet

  • Monetary Policy Committee lowers rates for third straight time
  • Inflation is almost 17 times higher than the bank’s 5% target

The Mahmutpasha Bazaar in the Fatih district of Istanbul.

Photographer: Erhan Demirtas/Bloomberg
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Turkey’s central bank lowered its benchmark interest rate for the third time in a row and by a bigger magnitude than forecast, signaling it’s close to ending a series of cuts that have pushed an ultra-loose monetary policy to new extremes.

Led by Governor Sahap Kavcioglu, the Monetary Policy Committee reduced its one-week repo rate to 10.5% from 12% on Thursday, despite annual inflation rocketing past 83%. The MPC said it will consider “taking a similar step at the following meeting and ending the rate-cut cycle,” according to a statementBloomberg Terminal accompanying its decision.