Türkiye Cuts Interest Rate For Second Month


(MENAFN- Trend News Agency)

The Central Bank reduced its key policy reduce the policy rate - one-week repo auction rate - from 13 percent to 12 percent after delivering a 100 basis points cut last month, Trend reports citing Hurriyet Daily News .

Most analysts had expected the bank to keep the key interest rate unchanged at its Monetary Policy Committee (MPC) meeting on Sept. 22.

“The committee expects the disinflation process to start on the back of measures taken and decisively implemented for strengthening sustainable price and financial stability along with the resolution of the ongoing regional conflict,” said the bank in a statement released after the MPC meeting.

Increase in inflation is driven by the lagged and indirect effects of rising energy costs resulting from geopolitical developments, effects of pricing formations that are not supported by economic fundamentals, strong negative supply shocks, according to the statement.

Consumer prices increased by 1.46 percent in August from July, bringing the annual inflation rate from 79.6 percent to 80.2 percent.

In the latest Medium-Term Program, the government forecasts that annual inflation will ease from 65 percent at the end of 2022 to 24.9 percent next year and further down to 9.9 percent in 2025.

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