Turkey’s central bank cut all of its three main interest rates, citing a slowdown in inflation.
The central bank reduced its benchmark one-week repo rate and the overnight borrowing rate by 25 basis points to 7.50 percent and 7.25 percent respectively.
It also trimmed the overnight lending rate by 50 basis points to 10.75 percent, according to a statement on its website. Analysts expected the bank to cut all three rates, according to median estimates in three separate Bloomberg surveys.
The government has persistently called for Governor Erdem Basci to lower borrowing costs to boost economic growth since the central bank more than doubled the main rate in an emergency meeting in January last year. The central bank has so far only partially unwound that increase and Prime Minister Ahmet Davutoglu called the rate cut on Tuesday insufficient.
“A more persistent reduction in inflation necessitates a cautious approach in monetary policy,” the bank’s Monetary Policy Committee said in the statement. “Taking into account the elevated volatility in food and energy prices, the committee decided to cut the interest rates at a measured scale.”
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