Turkey - Interest rate cut again - Economy


The Turkish central bank has lowered its key interest rate again despite the very high inflation. The central bank announced on Thursday in Ankara that the key interest rate would be reduced by 1.0 percentage point to 12.0 percent. The majority of economists, on the other hand, had expected the key interest rate to remain unchanged at 13.0 percent. The central bank had already reduced its key interest rate by 1.0 percentage point in August. Inflation was 80.2 percent in August. Actually, according to economic doctrine, significant interest rate increases would be announced. However, Turkish President Recep Tayyip Erdogan is opposed to high interest rates. He has repeatedly put pressure on the central bank. The Turkish lira eased after the decision. In view of the very loose monetary policy, it has been under pressure for a long time. It is currently weaker than ever against the US dollar. This makes import prices more expensive and also drives inflation.



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