The Central Bank of Turkey lowered the interest rate to 45%

ANKARA, Turkey (AP) – Turkey’s central bank cut its key interest rate by 2.5 percentage points to 45% on Thursday as inflation eased.

The Bank’s Monetary Policy Committee said it is lowering its benchmark interest rate to 45 percent from the current 47.5 percent in one week. In the previous discount in December, the bank did the same Reduce the amount by 2.5 percent Points.

Despite the sharp devaluation, the central bank has reaffirmed its commitment to controlling inflation, which has left many households in Turkey struggling to meet basic needs.

In a statement, the bank said, “Despite the trend of improvement in inflation and pricing behavior, risks to the inflation process continue.” “The committee will carefully consider the decision at the meeting, focusing on the price.”

Turkey’s annual inflation rate has dropped to 44.38% from 47.09% in December 2024, although independent economists say the real rate is much higher.

Inflation has increased in recent years, due to Depreciation of the Turkish lira and President Recep Tayyip Erdogan Unconventional economic policies Lowering interest rates despite high inflation.

Erdogan has long argued that high interest rates lead to inflation – a concept that runs counter to mainstream economic theory.

In the year In 2023, Erdogan appointed a new economic team, changing unconventional policies and launching a series of price hikes. The central bank kept interest rates at 50% for several months before cutting rates in December.