Ankara: The Central Bank of the Republic of Trkiye announced on Thursday that it has reduced the policy rate by 250 basis points, aligning with market expectations. This adjustment lowers the benchmark one-week repo rate from 47.5% to 45%.

According to Anadolu Agency, the central bank emphasized that a tight monetary policy would remain in place until there is a sustained reduction in inflation, ensuring price stability. The bank noted that the policy rate would be set to maintain the necessary tightness required by the projected disinflation path, considering both realized and expected inflation, as well as the underlying trend.

The bank further indicated that it would adopt a cautious approach, making decisions on a meeting-by-meeting basis, with a primary focus on the inflation outlook. In December, Trkiye's annual inflation rate decreased for the seventh consecutive month, reaching 44.38%, marking its lowest level since June 2023.

From May 2023 until last March, the central bank had incrementally increased the rate from 8.5% to 50%. It maintained this rate until the December meeting, when it initially decreased the rate by 250 basis points to 47.5%.