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(Bloomberg) -- A top Turkish central bank official told bankers that the pace of interest-rate cuts will be based on the course of inflation, pushing back against market expectations for sizable, consecutive reductions, according to people familiar with the matter.

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Central bank Deputy Governor Cevdet Akcay said earlier this week that the decisions would be taken meeting-by-meeting, people familiar with the discussions said, asking not to be named because the meetings were private. Some of the people said that he was cautioning against market pricing that implies a more aggressive cutting cycle.

The central bank declined to comment.

Markets and economists alike have been forecasting sizable interest-rate cuts in all of the eight policy meetings scheduled this year. The median forecast in a Bloomberg survey sees the year-end policy rate dropping to 30%, while markets price it at around 31.8%, compared with 47.5% now.

Barclays Plc and Turkiye Ekonomi Bankasi AS economists both said last month that they see 250 basis-point reductions in each of the meetings this year.

The yields on two- and five-year lira notes have declined by about 3 percentage points since mid-December as analysts adjusted their interest-rate forecasts downward and after better-than-expected inflation figures reported at year-end.

Turkey Seen Delivering Larger Cuts After Interest-Rate Surprise

Akcay also said that growing foreign-currency loans were a cause of concern among officials and that played a factor in their decision to reduce monthly growth limits to 1% from 1.5% for corporates, according to the people.

The next rate-setting meeting is scheduled for Jan. 23, with analysts predicting another 250 basis-point cut.

(Updates with bond performance in sixth paragragh, adds chart.)

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