Turkish Central Bank Cuts Interest Rate to 36 Percent Amid Falling Inflation

Istanbul, October 22 (KUNA) -- The Central Bank of Turkey announced on Thursday a cut in its key interest rate by 100 basis points to 36 percent, the first reduction in nine months, coinciding with a decline in the annual inflation rate to 29.73 percent in September. In a statement following a meeting of its Monetary Policy Committee, the bank said the committee decided to lower the one-week repurchase agreement (repo) rate from 37 percent to 36 percent, as well as reduce the one-night Turkish lira lending rate from 40 percent to 39 percent, and the one-night borrowing rate from 35.5 percent to 34.5 percent. It added that the decision came after holding interest rates steady during five previous meetings amid energy price fluctuations stemming from the war with Iran and their impact on inflation rates. The bank clarified that September’s inflation data and economic activity indicators showed a limited effect of supply shocks on domestic prices, alongside continued weakness in domestic demand, while warning of “ongoing risks related to rising energy prices due to geopolitical tensions and their impact on inflation expectations.” It noted that the annual consumer price inflation rate fell to 29.73 percent in September, marking its largest decline in about five years, while monthly inflation stood at 1.48 percent, unchanged from August. (End) T.A. / M.A. A.