(MENAFN- Khaleej Times) Turkey's central bank cut a key interest rate for the fifth month in a row on Tuesday, days after an attempted coup against President Recep Tayyip Erdogan triggered concerns over the country's economic outlook.
In a statement, the bank's Monetary Policy Committee said it had reduced its overnight marginal funding rate by a quarter percentage point to 8.75 per cent. All other interest rates were left unchanged. The move would help banks borrow more cheaply from day to day, which could help ease liquidity restraints that emerge in the financial system at a time of heightened uncertainty. The central bank's rate-setting body didn't mention the coup directly but said that "domestic developments have led to fluctuations in financial markets". "Market developments will be closely monitored and the necessary liquidity measures will continue to be taken to support financial stability," it said. The panel sought to downplay worries about the economic outlook, arguing that recent policy and liquidity measures "have increased the resilience of the economy against shocks". Some economists had expected an even bigger reduction in the marginal interest rate of half a percentage point, in line with the central bank's last three cuts. The more modest reduction may point to some concern about the impact on the Turkish lira, which has fallen sharply since the coup attempt and could be weakened further by lower interest rates.
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