Turkish Central Bank cuts benchmark rate to 14%, in line with expectations

By Aysu Bicer

ANKARA (AA) - The Turkish Central Bank on Thursday cut its benchmark one-week repo rate by 100 basis points from 15% to 14% in line with market expectations.

With the latest cut, the monetary authority has lowered the key rate by 500 basis points since September.

In previous statements, the bank signaled it would reduce rates one more time, this month, before stopping in January.

"Increase in inflation in November has been driven by developments in exchange rates and supply-side factors such as the rise in global food and agricultural commodity prices, supply constraints," said the bank, noting inflationary pressures.

The bank also said it made a decision to "complete the use of the limited room implied by transitory effects of supply-side factors and other factors beyond monetary policy’s control on price increases."

In November Turkey saw an annual increase of 21.31% in consumer prices.

The bank has intervened in foreign exchange markets four times this month by selling dollars, citing "unhealthy price formations."

With the latest intervention, the total amount of the bank's FX markets intervention rose to approximately $4 billion.