Ankara: The Central Bank of Turkiye (CBRT) on Thursday announced a significant cut in interest rates, reducing them by 300 basis points to 43%. This move surpassed market expectations and marks the continuation of a monetary easing cycle that had been paused due to political instability earlier this year.

According to Qatar News Agency, the recent decision comes as markets in Turkiye have shown stability and inflation rates have seen a downward trend. The CBRT, in its statement, emphasized that the current tight monetary policy stance will persist until price stability is achieved. This approach aims to support the reduction in inflation through moderating domestic demand, a real appreciation of the Turkish lira, and improved inflation expectations.

The market had anticipated the CBRT's decision, particularly given the observed decline in inflation. Experts forecast that Turkiye's inflation rate, currently at 35.05%, will decrease to 30% by the end of the year. Data from the Turkish Statistical Institute revealed an unexpected drop in the country's annual inflation rate last month, reaching its lowest point since November 2021. Inflation decreased to 35.4 percent in June from 37.9 percent in April.

The interest rate cut on Thursday is the first since April, when the bank had previously raised rates to 46 percent. This earlier increase followed the arrest of Istanbul Mayor Ekrem Imamoglu, which had negatively impacted the Turkish lira.