The Central Bank of the Republic of Turkey (CBRT) revealed on Thursday its December decision to reduce its key interest rates by 2.5 percentage points to 47.5%, marking the first cut since February 2023.

"The underlying trend of inflation was essentially flat in November. Leading indicators point to a decline in the underlying trend in December. Indicators for the last quarter suggest that domestic demand, standing at disinflationary levels, continues to slow down. While core goods inflation remains low, the improvement in services inflation has become more apparent. Unprocessed food inflation appears to have moderated in December after an elevated course in the previous two months. While inflation expectations and pricing behavior tend to improve, they continue to pose risks to the disinflation process," CBRT commented.

The bank said that the tight monetary policy kept in the last months and the fiscal coordination are helping lower inflation and stabilize the Turkish economy.