Turkey's central bank cut its key interest rate by 250 basis points to 47.5% on Thursday, a bit more than expected, launching an easing cycle meant to leave behind protracted economic turmoil and a cost-of-living crisis.

Turkey’s central bank lowered its main interest rate for the first time in almost two years, pointing to slower consumer demand and the currency’s strength for a larger-than-expected cut of 250 basis points.

Analysts are now expecting the Turkish central bank to deliver sizable interest-rate cuts at every policy meeting in 2025 following Thursday’s bigger-than-expected reduction, despite officials cautioning against an uninterrupted easing cycle.