What Happened: The Turkish central bank has reduced its benchmark interest rate from by 325 basis points from 19.75 percent to 16.5 percent, Bloomberg reported Sept. 12.
Why It Matters: The central bank's decision marks the second substantial rate cut in recent months as macroeconomic conditions in the country continue to support monetary easing. Falling inflation numbers allowed the monetary authority to proceed with the rate reduction, but overt pressure by President Recep Tayyip Erdogan also likely contributed to the decision.
Background: The Turkish central bank has reduced interest rates by a combined 750 basis points since early July and markets had expected today's cut to be as large as 500 basis points. Turkish inflation recently fell to a 15-month low, according to August data.
- As Opposition Builds, Turkey's Erdogan Grasps at Straws (July 26, 2019)
- Turkey: Erdogan Appears Willing to Trade Economic Risk for Political Gain (July 10, 2019)
- Istanbul's Voters Deal Erdogan a Major Blow (June 24, 2019)