Turkish Central Bank will lower benchmark interest rate

Turkey’s Central Bank will probably reduce its benchmark interest rate to a new low this week, in what may prove to be the last move in eight months of monetary easing. The central bank will reduce the rate by quarter of a percentage point to 9 %, the eighth consecutive decline, as predict some economists surveyed by Bloomberg. The others forecast a half-point cut. The Ankara-based bank will announce its decision tomorrow. Governor Durmus Yilmaz has slashed 7.5 percentage points from the rate in the past seven months, trying to soften the impact of the global crisis as slumping demand sends industrial output and inflation tumbling. The inflation rate fell to 5.2 % in May, the lowest in 39 years. The central bank’s target for this year is 7.5 %. The statistics agency will also announce the level of unemployment for March. The rate jumped to 16.1 % in February, the highest since 2005. The agency will also release consumer confidence figures for May tomorrow. Talks between Turkey and the International Monetary Fund on a new accord, which started more than a year ago, have faltered after Turkey rejected IMF demands for spending cuts and measures to make the tax collection agency independent of political control. The benchmark ISE National 100 Index rose 0.2 percent last week to 34,816.71. The lira weakened to 1.5401 per dollar at 5:02 p.m. on June 12 from 1.5366 a week earlier. The yield on the benchmark lira bond tracked by ABN Amro fell to 12.8 % from 12.91 %.