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Turkey eyes further interest rate cut if January inflation falls

Turkey eyes further interest rate cut if January inflation falls
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Turkey’s central bank is thinking about cutting interest rates again if inflation continues to fall sharply.

The bank’s Governor has spoken of holding a monetary policy meeting as early as next week to discuss that.

Any change would come if inflation in January had slowed by more than 1.0 percent.

The bank is now talking about inflation nearing its five percent target by the middle of the year, which would be the lowest in 45 years.

Turkey’s central bank is under pressure from the government to further reduce the cost of borrowing ahead of a parliamentary election in June.

Turkey’s central bank lowered its main interest rate last week and drew a swift rebuke from government ministers who said the 0.5 percent cut was not enough to support economic growth.

The bank cut its main one-week repo rate to 7.75 percent in response to slowing inflation, but left other rates on hold.

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