The Central Bank of the Republic of Turkey reduced its one-week repo rate by 250 basis points to 45% on 23 January 2025, its second consecutive cut after the easing cycle began in December 2024. The decision follows a period of monetary tightening in which the policy rate was raised to bring inflation under control.
Annual consumer price inflation in Turkey fell to 44.38% in December 2024. The CBRT said in its statement that the tight monetary stance was 'strengthening the disinflation process' and that future adjustments would remain conditional on incoming data.
FROM TIGHTENING TO EASING
The January 2025 cut followed a 250 basis-point cut to 47.5% in December 2024. The CBRT had raised rates following a change in policy direction in 2023, when the central bank moved away from an approach of cutting rates despite high inflation.
Turkish annual CPI inflation had previously peaked at over 80%.
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