Turkey trims key interest rate to 38%

Turkey's central bank said Thursday it had cut its key interest rate to 38 percent as annual inflation figures slow.

At a policy meeting, the bank "decided to reduce the policy rate from 39.5 percent to 38 percent," it said in a statement.

The bank said following an increase in September, the underlying trend of inflation declined slightly in October and November.

Turkey's annual inflation slowed in November to 31.1 percent, down from 32.87 percent in October, its lowest in four years, according to official data.

The figure, which exceeded 75 percent in May 2024 before starting to fall, is now at its lowest level since November 2021.

The central bank warned however that while showing signs of improvement, inflation expectations and pricing behaviour "continue to pose risks to the disinflation process."

The bank forecast that year-end inflation would be at 31-33 percent.