Turkiye shocks markets with rate cut amid 80% inflation

In this photo illustration flag of Turkiye is displayed on a laptop screen and the symbol of Turkish Lira is displayed on a mobile phone screen in Ankara, Turkiye on May 03, 2022. [Celal Güneş – Anadolu Agency]

Turkiye’s Central Bank shocked markets, Thursday, with a cut to its benchmark policy rate, despite inflation in the country sitting near 80 per cent, Financial Times reports.

According to the report, the Turkish Central Bank’s statement, Thursday, said that the committee expects the “disinflation process to start” and that there are signals of a “loss of momentum in economic activity.”

Turkish lira slid 0.9 per cent against the dollar, trading at more than 18.1 to the greenback after the statement.

The lira has lost 26 per cent of its value against the dollar year to date, and plunged 80 per cent against the greenback in the last five years, the report added.

Consumers in Turkiye will likely be even more concerned about the inflation figures that are expected to rise further by the end of 2022.

READ: Turkiye still in a deficit in the second half of 2022

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