The Turkish central bank initiated its easing cycle by performing a bigger-than-expected 300 basis point rate reduction which brought the main rate to 43%. The central bank made this decision because inflation rates decreased and political tensions decreased after the arrest of a prominent opposition leader during the previous year. The bank announced its intention to maintain a careful stance by making rate cut adjustments according to inflation performance. The June inflation rate reached 35% after reaching its peak of 75% during the previous year. The lira maintained stability but political uncertainties persisted because of a recent corruption investigation into opposition mayors. Most economists predict that interest rates will decrease throughout 2025.
