ANKARA, March 6 (Xinhua) -- Türkiye's central bank on Thursday cut its key interest rate by 250 basis points to 42.5 percent, the second rate cut this year, following a decreasing underlying trend of inflation in February.
"Although domestic demand was above projections in the fourth quarter of 2024, it remained at disinflationary levels. Leading indicators suggest that domestic demand remains disinflationary in the first quarter of this year," the bank's Monetary Policy Committee said in a statement.
"The decisiveness regarding tight monetary stance is strengthening the disinflation process through moderation in domestic demand, real appreciation in Turkish lira, and improvement in inflation expectations," it said.
"The tight monetary stance will be maintained until price stability is achieved via a sustained decline in inflation," it added, noting that the committee will "adjust the policy rate prudently on a meeting-by-meeting basis with a focus on the inflation outlook."
Türkiye has been grappling with rising inflation for years. From June 2023 to March 2024, the central bank raised its key interest rate from 8.5 percent to 50 percent to tighten monetary policy and kept the interest rate unchanged until December.
The bank cut its benchmark interest rate by 250 basis points to 47.5 percent in December last year and further to 45 percent in January this year. It then kept the rate unchanged in February.
On Monday, official data released by the Turkish Statistical Institute showed Türkiye's annual consumer price index down to 39.05 percent in February from 42.1 percent in January. ■
