Turkey’s central bank lowered its key interest rate on Thursday, the first cut in nearly two years as it battles with double-digit inflation.

The bank’s monetary policy committee decided to reduce the policy rate from 50 percent to 47.5 percent, with a statement citing improvement in “inflation expectations and pricing behaviour”.

The last cut was in February 2023.

The central bank began to raise interest rates last year to battle soaring prices, after President Recep Tayyip Erdogan dropped his opposition to orthodox monetary policy.

It has kept the main rate stable at 50 percent since March.

Thursday’s decision signals the start of an easing cycle after eight months of steady policy.

Turkey’s annual inflation rate slowed for the sixth month in a row in November, at 47.1 percent.

The central now expects inflation to reach 44 percent at the end of 2024, up from a previous estimate in August of 38 percent.