Al-Jazeera correspondent in Turkey reported that the Central Bank announced a cut in the interest rate from 18% to 16%.
This came after a meeting held by the Monetary Policy Committee of the Central Bank today, Thursday, headed by the Governor of the Central Bank, Shihab Cavusoglu.
The Turkish Central Bank announced last month to cut the interest rate from 19% to 18%.
Meanwhile, a central bank statement indicated that the committee decided to support sustainable financing practices as a long-term policy without changing the main objectives of monetary policy.
He added that while the improvement in the current account balance is expected to continue, this trend, with its continued strength, is important for the goal of price stability.
He stressed that the Central Bank will firmly continue to use all the tools available to it until strong indicators appear indicating a permanent decrease in inflation, and the target of 5% is achieved in the medium term, in line with the main objective of price stability.
It is noteworthy that Turkish President Erdogan dismissed the two deputies of the Central Bank and a member of the Monetary Policy Board of the same bank in the middle of last week, which led to the Turkish lira recording a decline against foreign currencies.
For its part, the “Bloomberg” news agency quoted the central bank as saying that “the recent increase in inflation was driven by factors related to supplies,” describing it as temporary.
According to Bloomberg data, the lira fell by 2.9%, before the decline narrowed slightly to 2.3% at 9.4325 liras per dollar at 2:15 pm on Thursday, Istanbul time, according to the German news agency.
Erdogan describes himself as the "enemy" of high interest rates, and believes in the unorthodox premise that lower rates lead to lower inflation.