Turkey’s central bank makes big rate cut amid 80% inflation

By ZEYNEP BILGINSOY
Associated Press

ISTANBUL (AP) — Turkey’s central bank has delivered another massive interest rate cut despite eye-popping inflation above 80%. The action Thursday is the reverse of what other world economies are doing as they combat soaring inflation. The Turkish bank lowered its benchmark rate by 1 percentage point, to 12%. The lira sunk to record lows, which is likely to intensify the financial worries of residents who have seen their purchasing power erode. The Central Bank of the Republic of Turkey has followed President Recep Tayyip Erdogan’s unorthodox belief that high interest rates cause high inflation. In other parts of the world, central banks are increasing borrowing costs to tame inflation in line with traditional economic thinking.