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Turkish Central Bank Cuts Rates Again

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Turkey's central bank cut interest rates for a sixth policy session in a row, citing continued economic recovery and the need to sustain a disinflation path.

The Monetary Policy Committee, led by Governor Murat Uysal, slashed the policy rate, which is the one-week repo auction rate, to 10.75 percent from 11.25 percent, the TCMB said in a statement on Wednesday.

The latest reduction was the smallest in the current easing cycle. In January, the bank had cut the rate by 75 basis points.

The central bank had cut the rate by 200 basis points in the previous policy session in December. Prior to that, the rate was lowered by 250 basis points in October, 325 basis points in September and by 425 basis points in July.

"Considering all factors affecting the inflation outlook, the Committee decided to make a more measured cut in the policy rate," the central bank said.

"At this point, the current monetary policy stance remains consistent with the projected disinflation path."

The bank considers sustaining a moderate course in current account balance, which has recently recorded significant improvement, as a crucial element of the macroeconomic policy mix.

Rising protectionism, uncertainty regarding global economic policies, geopolitical developments and the recent Covid-19 outbreak in China are closely monitored for their impact on capital flows, international trade and commodity prices, the bank said.

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