Turkish rate cut a symbolic move

Today’s decision by the Central Bank of Turkey (CBRT) to cut its overnight lending rate – which forms the upper bound of its “interest rate corridor” – is a largely symbolic move that is most likely aimed at placating government ministers that have criticised the Bank for not doing enough to revive growth. In practice, market interest rates have already fallen to the bottom end of the CBRT’s corridor – and lingering concerns over the current account will prevent the lower bound from being cut for now.