Turkey's Central Bank may cut lending rate: survey

ANKARA (AA) – The Central Bank of Turkey is forecasted to cut its upper limit of interest rates corridor by 25 basis points for eight months in a row, according to a panel of economists surveyed by Anadolu Agency on Monday.

The survey in which 18 economists participated showed that almost all of them except two economists anticipate a 25 basis points rate cut at overnight lending rate, which is the rate at which banks borrow from the Central Bank overnight.

The economists participating in the survey also did not expect changes in neither overnight borrowing rate, under which banks lend or deposit money to the Central Bank, nor the one-week repo rate, known as the policy rate.

Last month, the Central Bank cut its overnight lending rate by 25 points following recent reductions in the last six months in line with the forecasts but left overnight borrowing rate, under which banks lend or deposit money to the Central Bank, unchanged at 7.25 percent.

The one-week repo rate, known as policy rate, was also kept at 7.5 percent.

Till last April when the new Governor, Murat Cetinkaya, took charge, the interest rates were a matter of debate between the Central Bank and the government as the bank’s administration implemented a tight monetary policy, while government officials claimed it was a limiting factor for growth that Turkey sorely need.