The bank also reduced the one-day loan rate from 49% to 46%, and the one-day deposit rate from 44.5% to 41.5%.
The basic interest rate was reduced by the central bank last March to 42.5%, but rose again to 46% in April due to market turmoil caused by the arrest of Istanbul’s Mayor Ekrem Imamoglu on alleged corruption charges.
According to the bank, Turkey’s projected inflation is 24% this year, decreasing to 12% in 2026 and 8% in 2027.
Despite persistent inflation, the Turkish central bank reduced the cost of money to 8.5% in February 2023, in line with Turkish President Recep Tayyip Erdogan’s theory that high interest rates cause inflation.
However, since then, the Turkish central bank has gradually increased the rates.
In today’s statement, the bank asserted that it would maintain a tight monetary stance until there is a significant and sustainable reduction in the underlying trend of inflation.
The Turkish Statistical Institute (Turkstat) announced in early July that year-on-year inflation was 35.05% in June, below economists’ expectations.
