Turkey's central bank lowered its key interest rate to 43%, with the three percentage point drop exceeding analysts' expectations, AFP reports.

The decision comes after the rate was raised to 46 percent in April amid economic turmoil sparked by protests over the arrest of Istanbul's opposition mayor - a key rival to President Recep Tayyip Erdogan - which led to the Turkish lira's depreciation against the dollar.

"The Monetary Policy Committee decided to cut the key interest rate - the weekly repo rate - from 46% to 43%," the central bank said in a statement.

According to official data, annual inflation in the country fell to 35.05 percent in June from 35.41 percent in May.

The bank said it would take its decisions in such a way as to create the necessary monetary and financial conditions to achieve the target inflation of 5 percent in the medium term. Tight monetary policy will be maintained until price stability is ensured, the position paper further stressed. 

The institution added that it was closely monitoring the possible consequences of geopolitical developments and growing protectionism in world trade. | BGNES