On Thursday, the Central Bank of the Republic of Turkey (CBTR) cut its benchmark interest rate, the one-week repo rate, by 150 basis points, from 12% to 10.50%. The expectation was for a smaller cut of 100 points.
Central bank statements:
We will continue to strengthen the instruments that support the effectiveness of the monetary transmission mechanism.
The spread between the official interest rate and lending rates driven by announced macroprudential measures is closely watched.
Leading indicators for the second half of the year continue to point to a slowdown in growth due to weakening foreign demand.
One of the risks is the probability of a recession in the main trading partners.
Pressures on the manufacturing industry are being closely watched.
market reaction
USD/TRY remained largely unchanged moving around 18.60, in line with recent days. This even despite the larger-than-expected drop in rates.
Source: Fx Street
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