Global credit ratings agency Fitch revised Türkiye’s outlook to “positive” from “stable” on Friday, citing a faster-than-expected buildup in foreign exchange reserves that has reduced external vulnerabilities.
The agency also affirmed the country’s long-term foreign-currency rating at “BB-.”
Annual inflation dipped to 30.89% in December, slightly below expectations. Consumer prices rose 30.9% year-over-year, with a 0.89% monthly increase.
On Thursday, Türkiye’s central bank lowered its key interest rate by a less-than-expected 100 basis-points to 37%, citing firming inflation, pricing behavior and expectations that threaten the disinflation process.
At its first policy meeting of the year, chaired by Governor Fatih Karahan, the bank also lowered the overnight lending rate from 41% to 40% and the overnight borrowing rate from 36.5% to 35.5%.
The cut to the one-week repo rate at the Monetary Policy Committee (MPC) meeting marked its fifth consecutive easing move since last July.
In December, the Central Bank cut its policy rate by 150 basis-points to 38%, amid softer-than-expected November inflation.
In October, the country’s central bank slowed its easing cycle with a 100 basis-point cut in its policy interest rate to 39.5%, flagging renewed inflation risks that pointed to a slowdown in a longer-term disinflation process.
