Turkey’s central bank reduced its key lending rate further, while maintaining the repo and borrowing rates on Tuesday.
The Monetary Policy Committee of the Turkish central bank trimmed the Marginal Funding Rate by 50 basis points to 9.00 percent from 9.50 percent. This was the fourth consecutive reduction in rate.
The bank had reduced the funding rate by 25 basis points in March and 50 basis points in April and May.
The overnight borrowing rate was left unchanged at 7.25 percent and the one-week repo rate at 7.50 percent. The outcome of the meeting came in line with expectations.
With inflation likely to remain within the central bank’s target range in the next few months, at least one more cut in the current easing cycle is expected, William Jackson, a senior emerging markets economist at Capital Economics, said.
He noted that the macroeconomic backdrop of falling inflation and currency stability has provided room for the MPC to respond to government pressure to lower rates.
The bank repeated that taking into account inflation expectations, pricing behavior and the course of other factors affecting inflation, the tight monetary policy stance will be maintained.
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