Turkey’s Central Bank Lowers Interest Rates, Lira Reacts Negatively

The Turkish lira fell today after Turkey’s central bank unexpectedly decreased its interest rates, following central banks of other nations in monetary policy easing.
The Central Bank of the Republic of Turkey decreased its key overnight lending rate from 12.5 percent to 11.5 percent and repo rate from 12 percent to 11 percent. The bank wrote in the statement:

Starting from February, core inflation indicators are expected to follow a downward path due to favorable cost factors. Also considering the recent expansionary monetary policy decisions throughout the globe, the Committee has decided to cut the upper limit of the interest rate corridor.

The rate reductions weren’t expected by analysts and the lira fell after the monetary decision.
USD/TRY rose from 1.7426 to 1.7488 as of 18:01 GMT today.

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