CBRT cuts policy rate to 36 percent: A new era in the economy

The Central Bank of the Republic of Turkey (CBRT) reduced its policy rate by 100 basis points from 37 percent to 36 percent at its Monetary Policy Committee meeting held on October 22. The main reason cited for the decision was the decline in annual inflation to 29.73 percent in September.

International press and financial circles are discussing the interest rate cut in the context of its effects on Turkey's economic policies. The Financial Times linked this step to the approximately 18 billion dollar investment fund scandal, drawing attention to its potential impacts on supervisory capacity and investor confidence.

S&P Global analyst Karen Vartapetov stated that Turkey has made progress in its return to traditional economic policies. However, Vartapetov emphasized that as the election period approaches, the sustainability of tight monetary and fiscal policies will be the real test for the economy.

Assessment: According to Sözcü columnist Mahmut Aydoğmuş, in addition to interest rates, inflation expectations, exchange rate trends, risk premiums, and trust factors in the financial system continue to be decisive for foreign investors.