Türkiye's external borrowing costs have seen a significant reduction, according to Finance Minister Mehmet Şimşek, falling to the lowest level in nearly three years.

Şimşek highlighted that the yield on Türkiye's 10-year U.S. dollar benchmark bond has fallen below 7% for the first time since November 2021.

That comes amid falling risk premiums that have been in a downward trend since authorities started reversing the previous low-rates policy more than a year ago.

"We have strengthened macro-financial stability and reduced risk premiums through our resolute implementation of our program. As a result, our external borrowing costs have significantly decreased," Şimşek wrote on social media platform X on Tuesday.

The minister further noted that this improvement in borrowing costs is positively impacting the private sector's access to external financing.

"In the upcoming period, we will make these gains permanent through structural reforms, further improving our risk premium," he added.

Since June last year, the central bank has raised its policy rate by a total of 4,150 basis points, reversing years of monetary stimulus to boost economic growth.

The bank last raised rates in March by 500 basis points, capping an aggressive tightening cycle to rein in soaring prices. It has since held steady while vowing to hike more if the outlook worsens.

Annual inflation began dipping in June and touched 61.78% last month in what is expected to be a gradual, lasting decline.