The Turkish Central Bank lowers the interest rate by 250 basis points.

The Turkish central bank decided on Thursday to reduce interest rates by 250 basis points from 47.5% to 45%, which was largely in line with market expectations.

The Turkish central bank stated that its decision came despite data showing an increase in inflation in Turkey during January after a decrease in December, as this increase was primarily due to rising prices in the services sector.

At the same time, the European Central Bank noted that domestic demand in Turkey has reached contractionary levels, while core inflation remained relatively low, prompting the bank to move towards easing monetary conditions.

The Turkish central bank confirmed in its monetary policy statement that it will maintain its tight monetary stance until price stability and the medium-term inflation target of 5% are achieved.

The bank indicated that its current monetary policy supports the process of disinflation by moderating levels of domestic demand, the real value of the Turkish lira, and improving inflation expectations.