Turkey: CBRT cuts policy (one-week repo auction) rate by bps 425 points to 19.75%

The Central Bank of the Republic of Turkey (CBRT) today announced that it cut the policy rate (one-week repo auction rate) by 425 points to 19.75% from 24%. 

With the initial market reaction, the USD/TRY pair gained more than 500 pips and rose to a 2-week high of 5.76. As of writing, the pair was trading near 5.72, adding 0.25% on the day. Below are some key takeaways from the CBRT's policy statement.

"Recently released data indicate a moderate recovery in the economic activity."

"The composition of growth is having a positive impact on the external balance."

"Current account balance is expected to maintain its improving trend."

"Turkish central bank says uncertainty regarding global economic policies are closely monitored in terms of their impact on both capital flows and international trade."

"Weaker global economic activity has strengthened the possibility that advanced economy central banks will take expansionary monetary policy steps."

"Net exports are expected to contribute to the economic growth and the gradual recovery is likely to continue with the help of the disinflation trend and the partial improvement in financial conditions."