Turkey's central bank on Tuesday lowered its policy interest rate for the first time so far this year, and at a faster rate than forecast by economists, as part of its efforts to contain the fast-appreciating lira and to achieve financial stability.
The central bank slashed its one-week repo rate by 50 basis points to 5 percent at the latest rate-setting session. Economists had forecast a lesser reduction by 25 basis points. The bank last made changes to the its main interest rate in December 2012, when it cut it by 25 basis points.
The central bank also lowered its overnight lending rate, which is the upper end of the interest-rate corridor, further by half-a-percent to 7 percent, marking the fourth reduction in a row. The borrowing rate was reduced by 50 basis points to 4 percent.
Turkey's headline inflation accelerated to 7.29 percent in March from 7.03 percent in February, owing mainly to higher food and accommodation costs. The central bank said that weak global demand and the commodity price outlook would contain the upward pressures on inflation.
The current policy framework and the decline in commodity prices are expected to contain the widening in the current account deficit, it said.
The Turkish economy expanded at a slower rate of 1.4 percent sequentially in the fourth quarter than 1.6 percent in the third quarter and 2.9 percent the second quarter.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.