Turkey lowers key interest rate to 12% despite raging inflation

Turkish Central Bank decided to reduce the main interest rate to 12 percent by order of the country’s financial lawmakers, despite inflation in the country surging beyond 80 percent.

The lira declined 0.25 percentage point after the announcement and was trading at a record low of $18.379. This considers more than 27 percent loss of its value to the dollar till now.

Turkish President Recep Tayyip Erdogan said that inflation will start to decline at the end of this year, after it jumped to more than 80 percent in August.

Turkey cut rates by 100 basis points in August, and had gradually lowered interest rates by 500 basis points at the end of 2021, setting off a currency crisis.