Turkey's President Tayyip Erdogan said on Saturday that there would be more interest rate cuts in 2025 after the central bank cut its key rate by 250 basis points to 47.5% this week.

Turkey’s central bank lowered its main interest rate for the first time in almost two years, pointing to slower consumer demand and the currency’s strength for a larger-than-expected cut of 250 basis points.

The decision to cut interest rates follows 18 months of monetary tightening and comes amid ongoing efforts to stabilize the country’s runaway inflation.

Turkey's central bank cut its key interest rate by 250 basis points to 47.5% on Thursday, a bit more than expected, launching an easing cycle meant to leave behind protracted economic turmoil and a cost-of-living crisis.

Turkey’s central bank lowered interest rates for the first time in almost two years after consumer inflation showed signs of easing and said that future easing steps would depend on price data.

Turkey’s central bank is expected to deliver its first interest rate cut in nearly two years on Thursday, with major banks divided on the size of the reduction.

By Akin Nazli in Belgrade The monetary policy committee (MPC) of Turkey’s central bank on December 26 cut its policy rate by 250bp to 47.5% (chart). The market was aware that a rate cut was on the cards.

Analysts are now expecting the Turkish central bank to deliver sizable interest-rate cuts at every policy meeting in 2025 following Thursday’s bigger-than-expected reduction, despite officials cautioning against an uninterrupted easing cycle.