Exasperated with long-standing political pressure, Turkey’s Central Bank seems to have caved in, moving to meet the demands of the president and the government to lower interest rates.
At its Jan. 20 meeting, the Central Bank’s Monetary Policy Committee lowered the benchmark one-week repo rate from 8.25% to 7.75%. The cut, however, failed to satisfy President Recep Tayyip Erdogan and the government. The Central Bank remained under fire. His back to the wall, Gov. Erdem Basci broke with tradition to announce days in advance that a further cut was likely on Feb. 4.