Turkey Central Bank Latest Base Rate Cut

Turkey's central bank has cut its base-rate equivalent by 1% because of falling inflation and output as well as the worsening economic outlook in the country. This is the latest in a serious of reductions that has seen the rate drop by over 6% in 5 months. The rate currently stands at 10.5%.

Economists predicted the fall after Turkey's industrial production dropped by over 21% in January, the biggest drop since records began in 1986, and inflation eased to 7.7% in February.

The Bank has said that more "measured" rate cuts are likely, because falling commodity and oil prices will cause inflation to continue falling, but inflation may jump upward in March.

Tim Ash, head of research for Central Europe, the Middle East and Africa for the Royal Bank of Scotland in London was quoted as telling Bloomberg: "The economic growth outlook is absolutely dismal, unemployment is rising and I can't see inflation coming from anywhere. The Central Bank may possibly lower the rate below 10 percent this year."

Some economists still expect Turkey to avoid recession, although some now believe that it will fall into recession this year. Either way, Turjey continues to grow in popularity with British property buyers, as evidenced by the recent release of Property Index search figures, and an article in The Daily Mail.

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