Turkey’s central bank delivered another 250 basis point cut to its key interest rate, lowering it to 45% while signaling more reductions ahead. The bank altered its policy framework by removing monthly inflation metrics from its decision-making criteria, focusing instead on expected and realized inflation trends. Despite inflation running at 44.4% in December, markets project a decline to 27% by year-end, though this remains above the central bank’s 21% target. The challenge lies in balancing growth support – as Turkey faces technical recession – with managing inflation expectations, which currently exceed official projections.