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Turkey’s central bank cuts rates further by 25 basis points

by ChemOrbis Editorial Team -
  • 19/07/2016 (15:28)
According to media reports, Turkey’s central bank has cut the upper end of its interest rate corridor today by 25 basis points to 8.75%, in line with expectations. The bank left its overnight-borrowing rate and one-week repurchase rate unchanged at 7.25% and 7.5%, respectively.

The bank reported in a statement on its official website that recently, domestic developments have led to fluctuations in financial markets. The bank assesses that the recent liquidity measures have alleviated the volatility, adding that it decided to take a measured and cautious step towards simplification. According to the statement, future monetary policy decisions will be conditional on the inflation outlook.

Analysts, meanwhile, attributed the recent cut to the bank’s attempts to help spur the economy following the failed coup attempt over the weekend. In addition, the Turkish government favors a consumption-led economy; therefore, it calls for lower rates. This year, Turkey’s central bank has implemented a 200 basis points decrease on overnight lending rate for simplification.
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