ANKARA: After the nation's central bank decided to lower its benchmark interest rate, the Turkish lira lost up to 1 percent of its value against the US dollar.The  Ankara bank said  on Thursday that the key rate would decrease from 14 percent to 13 percent.  In relation to the dollar, the lira dropped past 18.1.

Following a series of contentious rate decreases, the central bank has not increased its benchmark rate since December 2021, in accordance with President Recep Tayyip Erdogan's requests.

Since Erdogan publicly urged the central bank to follow his unconventional notion that higher interest rates create more inflation, the value of the Turkish lira has been steadily declining for almost three years. Turkish consumers already face hardships from high inflation and rising food and energy costs.

Turkey’s government has made a show of diplomatic overtures to many oil-rich Gulf states, mending formerly strained ties to attract much-needed investment, and has remained enthusiastically open to Russian companies and trade despite Western sanctions and Russia’s invasion of Ukraine.

Analysts anticipated no rate adjustment, thus the Turkish central bank's decision to lower rates surprised markets. According to statistics from Reuters, the main BIST index lost session gains and traded 0.8 percent lower after the judgement before turning positive and rising 0.2 percent in the hour that followed.

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