The Central Bank of the Republic of Turkey on Thursday reduced its benchmark one-week repo rate by 200 basis points, ONA reports citing Daily Sabah.
The decision marked fourth rate cut this year. Since July, the CBRT has slashed the one-week repo by 1,200 basis points, from 24% to 12%. Analysts expected a cut by 150 to 250 basis points.
The regulator announced the decision citing recent data indicating continued recovery in economic activity and improving inflation outlook.
"Recent forecasts suggest that inflation is likely to materialize close to the lower bound of the October Inflation Report projections for the end of the year, with risks around the disinflation path for 2020 being balanced," CBRT's Monetary Policy Committee said in a statement.
"Current account balance, which has recently recorded significant improvement, is expected to maintain a moderate course with the contribution of supportive policy measures," it added.
The bank stressed that maintaining the disinflation process requires the continuation of a cautious monetary stance.
"The extent of the monetary tightness will be determined by considering the indicators of the underlying inflation trend to ensure the continuation of the disinflation process," it said.
In 2018, the CBRT held nine MPC meetings as interest rates climbed from 8% to 24% over the course of the year.