The Central Bank of the Republic of Türkiye on Thursday lowered its policy rate by 250 basis points, matching market estimates.
The benchmark one-week repo rate was lowered to 42.5% from 45%.
The bank said its tight monetary policy would remain in place until price stability is achieved through a sustained reduction in inflation.
"Accordingly, the policy rate will be determined in a way to ensure the tightness required by the projected disinflation path taking into account realized and expected inflation, and the underlying trend," it said.
The bank stressed that it would make cautious decisions on a meeting-by-meeting basis, with a primary focus on the inflation outlook.
"Monetary policy tools will be used effectively in case a significant and persistent deterioration in inflation is foreseen," it added.
Türkiye's annual inflation rate in January eased for the ninth consecutive month to 39.05%, the lowest reading since June 2023.
From May 2023 until last March, the bank raised the rate from 8.5% to 50% and then kept it constant until its December meeting, when it lowered the rate by 250 basis points to 47.5%.
