Garanti (GARAN.IS) will lower short-term lending rates, after the Turkish central bank cut interest rates by another 100 basis points, and further reduce its foreign exchange lending, the CEO of its Spanish parent group BBVA (BBVA.MC) said on Thursday. Turkey"s central bank has delivered more than 400 bps in interest rate cuts since September and hinted at more easing despite inflation running near 20%. The latest cut saw the lira crash through the 11 to the dollar level to a record low. Asked what he made of the interest rate decision, which sparked fresh warnings from analysts that Turkey might face another currency crisis akin to 2018, BBVA Chief Executive Onur Genc said this was down to the country"s central bank. "They are the policymakers, they are doing what they think is right and in all these decisions there are trade offs - if you want to control inflation, if you want to trigger further growth in the country," Genc told Reuters. However, Garanti would pass on the move "if it is short term lending, of course, if it is long-term lending we will see (...) the long-term rates are not coming down." Nonetheless, Garanti would pursue its strategy of reducing its foreign exchange lending further after halving this from $20-plus billion five years ago to around $11 billion now. "We do think that with the currency devaluation that book might have vulnerabilities," Genc said on the day BBVA held an investor day. read more "This year it will be again negative and that is our strategy - we want to grow only in the local currency books, not in the FX book," he added Genc also said Garanti had reduced its FX wholesale funding which was a "critical vulnerability" by 43% while inflation linked bonds now made up nearly half of the bonds on its books, compared to just 15% five years ago. ($1 = 0.8811 euros)