Turkey’s Central Bank slashes interest rates after devastating earthquakes
The move is likely aimed at weathering the fallout from the devastating earthquakes in accordance with the Turkish government's economy policy to prioritize economic growth at the expense of inflation.
Turkey’s Central Bank delivered a fresh interest rate cut on Thursday as the Turkish government scrambles to offset the economic impact of the twin earthquakes that killed more than 43,550.
The bank announced that the country’s policy rate has been lowered by 0.5 percentage points from 9% to 8.5%, citing the need for economic growth and the earthquakes' impact on the economy.
As of this writing, the Turkish lira stood at 18.8752 against the US dollar, slightly weakening from a close of 18.8802 yesterday.
Under political pressure from Turkey’s President Recep Tayyip Erdogan, the country’s Central Bank embarked on a series of unorthodox rate cuts over the past year. It brought its policy rate to single digits from 14% to 9%, starkly contrasting with its emerging economy peers that have been increasing their policy rates to weather the fallout from the Ukraine war, which has further pushed up the prices of energy and other major commodities.
