Turkey Cut Rates by 200 Basis Points

January 15, 2009

The Central Bank of Turkey reduced its benchmark lending and borrowing rates today by 200 basis points to 15.5% and 13.0%.  A cut of only 75-100 bps had been anticipated.  These rates peaked in July at 20.25% and 16.75%. The lending rate was cut subsequently by 50 bps in October. Both rates were reduced by another 50 bps in November and 125 bps last month.  A statement defending the escalation of monetary easing cited worsening international credit market and economic problems and decelerating Turkish inflation.  Rates are likely to fall substantially further by mid-2009.

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