Turkish Central Bank Slashes Interest Rate By 75 Bps

Turkey's central bank cut its key interest rate for the fifth time in a row, albeit at the smallest measure in the series, citing continued recovery in economic activity. The Monetary Policy Committee, led by Governor Murat Uysal, slashed the policy rate, which is the one-week repo auction rate, to 11.25 percent from 12.00 percent, the TCMB said in a statement.

Economists had forecast a reduction to 11.5 percent. "At this point, the current monetary policy stance remains consistent with the projected disinflation path," the bank said.

The central bank had cut the rate by 200 basis points in the previous policy session in December. Prior to that, the rate was lowered by 250 basis points in October, 325 basis points in September and by 425 basis points in July. "As the contribution of net exports to economic growth declines, economic recovery is expected to be sustained with the help of the ongoing disinflation process and improvement in financial conditions," the central bank said. The bank expects the current account balance, which improved significantly in recent times, to maintain a moderate course with the contribution of supportive policy measures.