Turkey's Central Bank Cuts Interest Rate for Second Straight Meeting

By Ed Frankl

Turkey's central bank lowered borrowing costs for a second meeting in a row, noting that inflation continued to trend lower.

The central bank said Thursday that it would lower its benchmark rate to 40.5% from 43%. It had previously cut its key rate to 43% from 46% in late July.

"The underlying trend of inflation slowed down in August," the central bank said. "Recent data indicate that demand conditions are at disinflationary levels."

The bank raised interest rates in April after a series of swings in the Turkish lira following the arrest of a prominent political rival of President Recep Tayyip Erdogan, a move that spooked some investors.

It came after a series of rate cuts since the end of last year as annual inflation fell from heights of more than 75% in mid-2024. Inflation was at 33% in August, down a little from 33.5% in July. Gross domestic product rose a higher-than-expected 1.6% on quarter in April-June.

"While GDP growth was above projections in the second quarter, final domestic demand remained weak," the bank added.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

September 11, 2025 07:38 ET (11:38 GMT)