ANKARA (Reuters) – Turkey’s central bank held its key rate at 8.5% on Thursday, as expected, after easing 50 basis points last month following deadly earthquakes that devastated the south of the country. .

Unlike most major central banks, the Türkiye Cumhuriyet Merkez Bankası (TCMB) decided last year to cut rates by 500 basis points to stimulate a slowing economy as inflation soared to over 85%. .

It then maintained its rates at 9% in December and January. Since then, inflation has fallen but still reached 55% over one year in February.

Even before the recent earthquakes, which left more than 50,000 dead, analysts believed that the central bank could further ease its rates in view of the legislative and presidential elections on May 14.

Turkish President Recep Tayyip Erdogan, who is seeking a new term, faces his biggest political challenge in twenty years in power.

Presenting himself as an “enemy” of interest rates, he has called for monetary stimulus in recent years to boost growth and exports, but at the same time it has weakened the Turkish lira and pushed up prices.

In a Reuters survey of economists, six said they expected a 50 basis point rate cut this month, while 12 expected no change.

The economic cost of the earthquakes is estimated at around $104 billion and this is expected to reduce economic growth by one to two percentage points this year.

(Report Ali Kucukgocmen and Can Sezer; Claude Chendjou, edited by Blandine Hénault)

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