Foreign investors are flocking to Turkey's local debt markets, saying they are impressed by interest rate cuts and easing inflation and are hoping that a regional transformation could further boost their bets on the economy.

Turkey’s central bank has lowered its key interest rate by 2.5 percentage points to 45%. The decision on Thursday marked the second rate cut in a row and came as inflation slowed.

The central bank reduced its one-week repo rate to 45% from 47.5% as a cycle of higher borrowing costs bore fruit in cooler price rises.