Türkiye lowers the most important interest rate for the third consecutive time to 42.5%

The Turkish central bank lowered the most important interest rate for the third time in a row, days after the inflation data, which shows a faster slowdown than expected. The monetary policy committee, led by Governor Fateh Kahhan, decided to lower the re -purchase price for a week of 45% to 42.5% on Thursday. Almost all economists included in the “Bloomberg” poll expected to reduce the Turkish interest rates by 250 basis points. The move comes after the annual inflation rate in Türkiye dropped to 39% in February, which is the lowest level in 20 months, which strengthened the position of politically manufacturers on continued interest cut. However, the basic inflation, which excludes volatile goods such as food and energy, remains high, and the service sector is still noticeably high levels. In the statement that accompanies its decision, the Monetary Policy Committee said that “the primary trend of inflation decreased in February,” noted that “the inflation of the service sector has slowed after the special increase in January.” The committee added that “although local demand was higher in the fourth quarter than expectations, it remains at levels that support the way of inflation.” She also emphasized that the interest rate will be determined according to a future view of inflation, and a glow that depends on each “meeting separately”. Turkish stocks are rising by reducing interest in the response of the ‘Istanbul 100’ index with the decision to reduce the decision as it reduced its profits for a short period to 0.1%, but it was 0.4% higher at 2:06 p.m., in line with expectation. As for the Turkish lira, it settled at 36.43 against the US dollar without little change. Last month, by the end of the year, the central bank increased its forecast for inflation from 21% to 24% on the grounds that price pressure is revised according to previous inflation rates such as education and rent, saying that these factors remain outside the scope of monetary policy. The challenge facing officials is to persuade the Turks to keep their savings of Lira in light of the decline in interest. According to “Goldman Sachs” economists, foreign exchange deposits increased by about $ 10 billion last month. The lira has dropped by 3% against the dollar since the beginning of the year, making it the second worst performance in the emerging markets after the Argentine Peaso. Families and businesses are also higher than the central banking estimates, and policymakers consider it a risk that threatens to reduce inflation. High prices expectations can accelerate the preceding purchases at a time when the central bank wants to calm the demand. Although the prices of producers have dropped faster, the economic activity paid for consumption is still relatively strong. “According to the sector, a quick look at inflation expectations is the complexity of the way to reduce inflation,” said economists at City Group, Elkir Domak and Jalkin Ashlafar, before the decision was issued. He added: “The right families and sector expectations indicate a slower inflationary process than the authorities expect,” and expect inflation to delay to 28% by the end of 2025.