Turkey has cut borrowing costs as the central bank sought to support the economy following this month’s devastating earthquake, the latest in a series of big interest rate reductions ahead of this year’s election.
The central bank on Thursday cut its main interest rate by 0.5 percentage points to 8.5 per cent, matching expectations of economists polled by Refinitiv. The benchmark one-week repo rate has been cut from 19 per cent in March 2021 to 9 per cent by the end of last year under pressure from Turkish president Recep Tayyip Erdoğan.
Policymakers said the latest interest rates cut was made in part to dull the effects of the February 6 earthquake, which toppled thousands of buildings, killed more than 47,000 people and upended the lives of millions more. “It has become even more important to keep financial conditions supportive to preserve the growth momentum in industrial production and the positive trend in employment after the earthquake,” the central bank said.