The Central Bank of the Republic of Turkey (CBRT) announced on Thursday that it decided to cut its policy rate, or the one-week repo auction rate, from 45% to 42.5%.

The bank stated that Turkey's inflation decreased in February after an uptick in January, in line with projections and mainly due to prices in the services sector. Furthermore, domestic demand was above projections in the fourth quarter and remained at disinflationary levels. "Core goods inflation remains relatively low," the bank said in a statement.

The CBRT stressed that all further monetary policy decisions will be aimed at ensuring a decline in the underlying trend of inflation and to reach the 5% inflation target in the medium term. It assessed that its policy is "strengthening the disinflation process through moderation in domestic demand, real appreciation in Turkish lira, and improvement in inflation expectations."