Turkey central bank cuts policy rate

Food

Turkey’s central bank on Tuesday lowered its policy interest rate for the first time this year, as part of its efforts to contain the fast-appreciating lira and to achieve financial stability. The central bank slashed its one-week repo rate by 50 basis points to 5% at the latest rate-setting session. The bank last made changes to its main interest rate in December last year, when it cut it by 25 basis points. The central bank also lowered its overnight lending rate, which is the upper end of the interest-rate corridor, further by half-a percentage to 7%, marking the fourth reduction in a row. The borrowing rate was reduced by 50 basis points to 4%. Turkey’s headline inflation accelerated to 7.29% in March from 7.03% in February, owing mainly to higher food and accommodation costs. The central bank said that weak global demand and the commodity price outlook would contain the upward pressures on inflation.

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