Central Bank of Turkey lowered the interest rate again

Despite the historical sharp decline in the Turkey national currency, the country’s Central Bank ended its December session with a verdict on another cut in the discount rate. It was 14%, down from 15%. Market expectations concerning a further cut in the Central Bank ratio before that on Thursday plunged the lira trade rate to a new record low – below 15 lira per dollar. At the beginning of this year, the lira trade rate was 7.4 lira per dollar. Since then, Turkey’s national currency has collapsed by more than 50%. It showed the most significant decrease in a twenty-year period on November 23, when its rate fell by 16%. The main trigger for this was the Turkish central bank decision to lower the ratio to 15% from 16%. And even after that, the country’s President Tayyip Erdogan didn’t change his view regarding the further decrease of the discount rate. At the initiative of the Turkish President, the chairmen of the Turkish financial governor have changed three times since July 2019. And since November of this year, there have already been two of them.

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Arseny Kudrin

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