Inflation in Turkey has fallen to its lowest level since 2021.

In the last month, annual inflation in Turkey decreased to 35.4%, the lowest level since November 2021. This figure turned out to be lower than economists' expectations, which anticipated it at 37.9%. This slowdown occurred due to the cancellation of the utility discount program, which last year led to a sharp rise in inflation to 75.5%.

Following the release of the report showing a decline in inflation rates, Turkish stocks surged, indicating expectations of a reduction in interest rates by the central bank in the near future. The main Borsa Istanbul 100 index rose by 2.6%, mainly due to the increase in bank stock prices. Meanwhile, the yield on government bonds decreased. Inflation forecasts for the end of the year remain at 24%, which divides analysts' opinions on the possibility of lowering interest rates in June or later.

After the slowdown in inflation in Turkey and the positive market reaction to this development, a potential decrease in interest rates by the central bank in the country in the near future could impact the financial and economic situation of the country.