Turkey's central bank on Thursday lowered its policy interest rate for the second time in a row, and to a greater extent than forecast by economists, as part of its efforts to contain the fast appreciation of the lira and to prop up the faltering economy.

The central bank slashed its one-week repo rate by 50 basis points to 4.5 percent at the latest rate-setting session, following a similar cut at the previous meeting. Economists had forecast a lesser reduction by a quarter percent.

The central bank also lowered its overnight lending rate, which is the upper end of the interest-rate corridor, further by half-a-percent to 6.5 percent, marking the fifth reduction in a row. The borrowing rate was reduced to 3.5 percent from 4 percent.

Turkey's headline inflation weakened more-than-expected to 6.13 percent in April from 7.29 percent in March, when it accelerated from February's 7.03 percent.

The economy expanded at a slower rate of 1.4 percent sequentially in the fourth quarter than 1.6 percent in the third quarter and 2.9 percent the second quarter.

RTTNews