Turkey's central bank on Thursday lowered its key interest rate to 45 percent after inflation weakened further last month, though it said prices could have started rising again in January.
The move came after the central bank cut its rate for the first time in two years in December, saying its efforts to tame sky-high inflation were starting to pay off.
"While the underlying trend of inflation decreased in December, leading indicators point to an increase in January, in line with the projections," the bank said after its latest cut of 2.5 percentage points.
"The tight monetary stance will be maintained until price stability is achieved via a sustained decline in inflation," it added.
Turkey's annual inflation rate slowed for the seventh consecutive month in December, to 44.3 percent.
But the official figures are disputed by the ENAG group of independent economists, which publishes its own numbers every month and said year-on-year inflation stood at 83.4 in December.
Turkey has experienced double-digit inflation since 2019, making life increasingly more expensive for millions of people.
"Solving our citizens' financial difficulties is our top priority," Economy Minister Mehmet Simsek posted on X this month, adding that officials "are continuing to implement the disinflation programme with utmost determination".
"Given signs that underlying inflation pressures are easing, we think it's most likely that policymakers opt for another 250 basis point reduction at the next meeting in March," said William Jackson, chief emerging markets economist at Capital Economics.
"The easing cycle will probably slow later in the year, with the policy rate ending the year around 30 percent," he forecast.
With AFP
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