Turkey surprises with rate cut

Turkey’s central bank unexpectedly cut its one week repo policy rate by 25 basis points to 6.25 per cent yesterday, taking another step in potentially risky monetary policy designed to stem speculative inflows into the country's financial system and cap the appreciation of the lira - and thus moderate the bourgeoning current account deficit. Overnight borrowing and lending rates were kept at 1.5 per cent and 9 per cent respectively.