Key rate may see new low

Bloomberg

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The Central Bank will reduce the rate by half a percentage point to 9.25 percent, the seventh consecutive cut, according to all seven economists in a Bloomberg survey. The Ankara-based Bank will announce its decision at 7 p.m. Thursday. Governor Durmuş Yılmaz has already slashed 7 percentage points from the rate in the past six months, trying to soften the impact of the global crisis as slumping demand sends industrial output and inflation tumbling.

"We expect the main rate to reach 9 percent in the next couple of months," said Haluk Bürümcekçi, chief economist at Fortis Bank in Istanbul, who predicts a half-point reduction this week. "There’s a chance of more since inflation came inwell."

The inflation rate fell to 6.1 percent in April, the lowest rate in 39 years.