Turkish central bank makes huge rate cut amid 83% inflation

ZEYNEP BILGINSOY
Associated Press

ISTANBUL (AP) — Turkey’s central bank has slashed interest rates for the third month in a row, making its biggest drop this year despite sky-high inflation that is squeezing people’s finances. The Central Bank of the Republic of Turkey on Thursday lowered the benchmark rate by 1.5 percentage points, to 10.5%. Turkey has followed President Recep Tayyip Erdogan’s unorthodox belief that high borrowing costs cause high inflation, though traditional economic thinking says that raising rates is the antidote to inflation. The country saw inflation hit a staggering 83.45% in official September statistics. Central banks worldwide have taken the opposite route of Turkey, raising rates to clamp down on inflation.