September 12, 2019 / 5:47 AM / a year ago

Turkish lira weakens ahead of expected central bank rate cut

ISTANBUL, Sept 12 (Reuters) - The Turkish lira weakened on Thursday as investors weighed up prospects for a central bank policy setting meeting where the bank has been forecast to cut its policy rate by 250 basis points.

At 0540 GMT, the lira stood at 5.7575, weakening from a close of 5.7450 on Wednesday. The monetary policy committee decision will be announced at 1100 GMT.

A Reuters poll showed on Tuesday that the one-week repo rate will be cut to 17.25% this week and be lowered to 16% by year end as the bank continues an easing cycle meant to help lift the economy from recession.

In July, the central bank slashed the rate to 19.75% from 24% in its first policy change since September 2018. Last year, a currency crisis chopped 30% from the value of the lira and sent inflation soaring to a 15-year high above 25%.

The bank is expected to follow up with another aggressive move and cut its policy rate by 250 basis points, the median estimate in a Reuters poll of 23 economists showed. Estimates ranged from cuts of 175 to 450 basis points. (Reporting by Behiye Selin Taner; Editing by Daren Butler)

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