Turkey’s central bank lowers key interest rate to 47.5%

ANKARA, Turkey (AP) — Turkey’s central bank has lowered its key interest rate by 2.5 percentage points to 47.5%, carrying out its first rate cut in nearly two years as it tries to control soaring inflation. Citing slowing inflation, the bank’s Monetary Policy Committee said Thursday it is reducing its one-week repo rate to 47.5% from the previous 50%. Inflation in Turkey surged to a high of 85% in late 2022 due to declining foreign reserves and President Recep Tayyip Erdoğan’s unconventional policy of lowering rates as a way to tame inflation. Following a return to more conventional policies, the central bank raised interest rates from 8.5% in May 2023 to 50% in March 2024 and had kept them steady until Thursday’s rate cut.