RTTNews - Turkey's central bank on Tuesday lowered its key interest rate, the overnight borrowing rate, to 8.75% from 9.25%. The bank also cut its overnight lending rate to 11.25% from 11.75%.

The central bank noted that the tightness in the financial markets continues to persist to some extent, suggesting that some downside risk to the real economy still remain. The Central bank therefore said the next rate cut may be measured with the easing bias to be maintained for a considerable period. At the same time, the bank said it would consider a deceleration in the pace of rate cuts or a pause should the improvement in the economic activity turn to a robust recovery.

Meanwhile, in order to enhance liquidity in the economy, the Monetary Policy Committee of the central bank has also approved the use of repos of up to three month maturity, in addition to the main funding instrument of one-week repos.

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