Turkey – central bank cuts key interest rate massively – economy

Despite a very high inflation rate, the Turkish central bank has drastically reduced its key interest rate. The central bank announced on Thursday in Ankara that the key interest rate will be reduced by 2.0 percentage points to 16.0 percent. Economists had only expected a decrease to 17 percent on average. After the significant rate cut became known, the Turkish lira came under considerable pressure and fell to record lows against the US dollar and the euro. The central bank is apparently giving in to pressure from President Recep Tayyip Erdogan, who repeatedly calls for interest rate cuts. Most recently he fired three central bankers. After the interest rate cut, the key interest rate is even more significantly below the Turkish inflation rate. This was 19.58 percent in September.