ANKARA, Dec 13: Turkey’s Central Bank on Thursday slashed its key overnight borrowing rate by 50 basis points to 15.75 per cent despite faltering efforts to reduce inflation.

The Bank’s monetary policy board said its decision was based on expectations that a slowdown in government spending would help bring inflation down.

“The board believes the recent increase in inflation is not of a durable nature ... and sees a high possibility of inflation coming close to the target in the mid-term,” a statement said.

“Despite the risk posed by food and energy prices, inflation is expected to continue to fall,” it said.

It was the fourth time that the overnight borrowing rate was reduced since September when the bank slashed the rate for the first time in 14 months.

Consumer prices in Turkey rose 1.95 per cent in November from the previous month to reach 8.4 per cent on a 12-month basis, well above the government’s year-end target of four per cent.—AFP