Turkey cuts interest rate to 36%

The Central Bank of Turkey cut its key interest rate to 36 percent on Thursday, marking the first reduction in nine months, citing a recent slowdown in inflation rates.

In a statement, the bank said it had decided during its monetary policy meeting to “lower the key interest rate... from 37 percent to 36 percent.”

This is the first cut since January, when the bank reduced the key rate from 38 percent to 37 percent, a level it maintained until Thursday’s meeting.

However, ongoing geopolitical tensions have kept energy prices high, which could push inflation higher, according to the bank, which also noted that the repercussions of these geopolitical developments are “being closely monitored.”

Official figures showed that Turkey’s annual inflation rate fell to 29.7 percent in September, down from 31.5 percent in August, marking the first time the rate has dropped below 30 percent in about five years.

At the time, Finance Minister Mehmet Şimşek stated that the rate had reached its lowest level since November 2021 and wrote on the X platform that “inflation slowdown is spreading across all sectors, except for transportation.”

Official figures have been questioned by Enag, a group of independent economists that publishes its own data, which indicated that its figures showed the annual inflation rate reached 46.6 percent in September.