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Turkey Holds Base Interest Rate at 37%
The Central Bank of Turkey held its benchmark policy rate at 37% in its March 2026 meeting, aligned with recently revised market consensus as the central bank was widely expected to continue cutting interest rates until the outbreak of war in the Middle East triggered a surge in energy prices and raised the outlook inflation for major economies. It was the first hold following five consecutive cuts, reflecting policymakers' heed to the impact that higher energy prices may have on the Turkish economy. The central bank had already been forced to intervene in foreign exchange markets earlier in the month to contain the slide in the lira, and suspended one-week repo auctions, which lifted the lira interbank overnight reference rate by 300bps to nearly 40%. The central bank continued to see underlying inflation as stable as of February, and signaled it will see the impact of geopolitical developments on the economy before deciding possible policy responses.
Published on 2026-03-12

Turkey Holds Base Interest Rate at 37%
The Central Bank of Turkey held its benchmark policy rate at 37% in its March 2026 meeting, aligned with recently revised market consensus as the central bank was widely expected to continue cutting interest rates until the outbreak of war in the Middle East triggered a surge in energy prices and raised the outlook inflation for major economies. It was the first hold following five consecutive cuts, reflecting policymakers' heed to the impact that higher energy prices may have on the Turkish economy. The central bank had already been forced to intervene in foreign exchange markets earlier in the month to contain the slide in the lira, and suspended one-week repo auctions, which lifted the lira interbank overnight reference rate by 300bps to nearly 40%. The central bank continued to see underlying inflation as stable as of February, and signaled it will see the impact of geopolitical developments on the economy before deciding possible policy responses.
Published on 2026-03-12

Turkey Cuts Rate by Less than Expected
The Central Bank of Turkey cut its benchmark policy rate by one percentage point to 37% in its first meeting of 2026, less than the median market expectations of a 1.5 percentage point cut, but still marking the lowest rate since November of 2023. The central bank noted that the underlying inflation trend softened in the end of last year despite the increase in the headline rate due to higher food prices, warranting a slight reduction in tight monetary conditions. Still, policymakers stressed that upside risks to inflation remain, as unpredictable pricing behaviour and elevated inflation expectations continued to pose risks to the disinflation process.
Published on 2026-01-22

Turkey Cuts Rate by Less than Expected
The Central Bank of Turkey cut its benchmark policy rate by one percentage point to 37% in its first meeting of 2026, less than the median market expectations of a 1.5 percentage point cut, but still marking the lowest rate since November of 2023. The central bank noted that the underlying inflation trend softened in the end of last year despite the increase in the headline rate due to higher food prices, warranting a slight reduction in tight monetary conditions. Still, policymakers stressed that upside risks to inflation remain, as unpredictable pricing behaviour and elevated inflation expectations continued to pose risks to the disinflation process.
Published on 2026-01-22

Turkey Cuts Rate by 150 bps to 38%
The Central Bank of Turkey cut its policy rate to 38% from 39.5% in December 2025, marking a fourth consecutive reduction, and by more than market expectations of a softer cut to 38.5%, amid softer-than-expected November inflation. Food prices came in lower than projections, helping ease the underlying inflation trend for a second month. The bank also reduced its overnight lending and borrowing rates to 41% and 36.5%, respectively. Despite improving demand conditions and a slight cooling in price pressures, the Monetary Policy Committee warned that inflation expectations and pricing behavior still threaten the disinflation path. It reaffirmed that tight monetary policy will continue until price stability is secured, with rate decisions made cautiously and guided by data. The bank aims to steer inflation toward its 5% medium-term target, even as annual inflation at 31.1% in November remains well above the 24% year-end goal.
Published on 2025-12-11

Turkey Cuts Policy Rate at 39.5% as Expected
The Central Bank of Turkey cut its key one-week repo rate by 100bps to 39.5% in October 2025, as expected, alongside reductions in the overnight lending rate to 42.5% and the borrowing rate to 38%. While demand conditions suggest disinflationary pressures, recent data indicate a slower pace of disinflation and rising risks from food prices. The Bank reaffirmed its commitment to a tight monetary stance until price stability is secured, emphasizing that policy will be guided by realized and expected inflation and its underlying trend. The Committee will adjust rates cautiously, reviewing each step based on inflation dynamics, and stands ready to tighten further if inflation deviates from interim targets. It also signaled potential macroprudential measures to support monetary transmission if needed. Liquidity conditions will be closely managed, with the overarching goal of achieving a 5% medium-term inflation target through a transparent, data-driven approach.
Published on 2025-10-23

Turkey Cuts Policy Rate to 39.5% as Expected
The Central Bank of Turkey cut its key one-week repo rate by 100bps to 39.5% in October 2025, as expected, alongside reductions in the overnight lending rate to 42.5% and the borrowing rate to 38%. While demand conditions suggest disinflationary pressures, recent data indicate a slower pace of disinflation and rising risks from food prices. The Bank reaffirmed its commitment to a tight monetary stance until price stability is secured, emphasizing that policy will be guided by realized and expected inflation and its underlying trend. The Committee will adjust rates cautiously, reviewing each step based on inflation dynamics, and stands ready to tighten further if inflation deviates from interim targets. It also signaled potential macroprudential measures to support monetary transmission if needed. Liquidity conditions will be closely managed, with the overarching goal of achieving a 5% medium-term inflation target through a transparent, data-driven approach.
Published on 2025-10-23

Turkey Cuts Policy Rate at 39.5% as Expected
The Central Bank of Turkey cut its key one-week repo rate by 100bps to 39.5% in October 2025, as expected, alongside reductions in the overnight lending rate to 42.5% and the borrowing rate to 38%. While demand conditions suggest disinflationary pressures, recent data indicate a slower pace of disinflation and rising risks from food prices. The Bank reaffirmed its commitment to a tight monetary stance until price stability is secured, emphasizing that policy will be guided by realized and expected inflation and its underlying trend. The Committee will adjust rates cautiously, reviewing each step based on inflation dynamics, and stands ready to tighten further if inflation deviates from interim targets. It also signaled potential macroprudential measures to support monetary transmission if needed. Liquidity conditions will be closely managed, with the overarching goal of achieving a 5% medium-term inflation target through a transparent, data-driven approach.
Published on 2025-10-23

Turkey Cuts Policy Rate Beyond Expectations
The Central Bank of Turkey cut its benchmark interest rate by 250 bps to 40.5% in its September meeting, more than market expectations of a softer cut to 41%. The move follows signs of slowing underlying inflation in August, though food and services prices continue to pressure inflation. Despite stronger-than-expected Q2 growth, domestic demand remains weak, keeping demand conditions disinflationary. Policymakers stressed that tight monetary policy will stay in place until price stability is achieved, working through demand, exchange rate, and expectations channels. The Committee will assess policy rate steps cautiously, guided by inflation trends and interim targets, with room to tighten if inflation deviates significantly. Decisions will aim to secure the medium-term 5% inflation target within a predictable, transparent, and data-driven framework. In the meantime, the overnight borrowing rate and the overnight cutting rate were also reduced by 250 bps to 43.5% and 39%, respectively.
Published on 2025-09-11

Turkey Cuts Interest Rate by 300bps
The Central Bank of Turkey cut its benchmark interest rate by 300 basis points to 43% in its July 2025 meeting, more than median market expectations of a softer cut to 43.5%. The move erased most of the 350bps hike in the benchmark rate in April, when geopolitical tension triggered a plunge in the lira and threatened the monetary authority's tools that control the depreciation of the currency. The central bank noted that the underlying trend of inflation was unchanged according to the latest data, although higher borrowing costs drove disinflationary effects of demand conditions to increase. The TCMB also noted that increased economic uncertainty and the rise of protectionism in global trade also placed downside risks to growth, also warranting a reduction in borrowing costs. In the meantime, the overnight borrowing rate and the overnight cutting rate were also reduced by 300bps to 46% and 41.5%, respectively.
Published on 2025-07-24

Turkey Holds Policy Rate at 46% as Expected
The Central Bank of Turkey held its benchmark interest rate at 46% in its June 2025 meeting following the unexpected, 350bps hike from its last decision, aligning with market expectations. Policymakers at the monetary authority. noted that inflationary pressures eased since April while risks against Turkish growth were more pronounced, largely due to heightened uncertainty in the global macroeconomy amid protectionist trade policies and geopolitical tension. The central bank noted that the current level of interest rates are also high enough to prevent further pressure on their capital accounts that could trigger plunges in the lira. Exchange rate stability was previously noted as a priority for the central bank, which aggressively lifted interest rates in April after political conflicts between President Erdogan and the mayor of Istanbul triggered a plunge in the domestic currency.
Published on 2025-06-19

Turkey Unexpectedly Delivers Aggressive Rate Hike
The Central Bank of Turkey hiked its benchmark rate by 350bps to 46% in its April 2025 meeting, contrasting with market expectations that favored a hold, and marking a sharp contrast with the three consecutive rate cuts from the three past decisions. The TCMB also noted that policy will remain tight until price stability is achieved. The Monetary Policy Committee noted that the latest leading indicators suggested domestic demand rose more than expected in the start of the year, warranting tighter monetary policy despite citing that underlying inflation trends were lower in March. The Committee also cited that rising protectionism in global trade risked disrupting the disinflation process that allowed for rate cuts in the last meetings. While not making a direct reference, the MPC also lifted rates to ease pressure on the lira after President Erdogan's jailing of his main political rival drove the currency to plunge since the central bank's last cut.
Published on 2025-04-17

Turkey Cuts Rate by 250 bps as Expected
The Central Bank of Turkey cut its benchmark one-week repo auction rate by 250bps to 42.5% in March 2025, the lowest since December 2023, as expected. It follows two similar moves in December and January. The Monetary Policy Committee cited a decline in the main trend of inflation in February after January's rise (39.05% vs 42.12%). Also, domestic demand remains supportive of disinflation, and inflation expectations are improving but still pose a risk. The tight monetary policy stance will continue until inflation and price stability are achieved, with future rate decisions guided by inflation data and expectations. The Committee remains committed to using all monetary policy tools to bring inflation to the 5% medium-term target through a data-driven and transparent approach.
Published on 2025-03-06

Turkey Delivers Another 250bps Rate Cut
The Central Bank of Turkey cut its benchmark one-week repo auction rate by 250bps to 45% in its January 2025 decision, as expected by financial markets, extending the 250bps rate cut in the previous month, which was the first rate cut since a series of unorthodox policy loosening drove the rate to bottom at 8.5% in February 2023. The Monetary Policy Committee noted that the main trend of inflation declined according to the latest data, warranting the continuation of policy normalization. The softer price growth was underscored by lower inflation for core goods, although leading indicators for services inflation indicated an upturn for the gauge in upcoming months. Despite the cut, the MPC deemed policy to be sufficiently restrictive to aid the ongoing disinflation trend. The central bank sees inflation ending the year at 21%, while surveys showed a greater degree of skepticism by markets, which forecast inflation to end the year at 27%.
Published on 2025-01-23

Turkey Delivers 250bps Rate Cut
The Central Bank of Turkey cut its benchmark one-week repo auction rate by 250bps to 47.5% in its December 2024 decision, ending the nine-month stretch of borrowing costs at a 14-year high, to mark its first rate cut since a series of unorthodox rate cuts bottomed at 8.5% in February 2023 despite a plunging lira and soaring inflation at the time. This contrasted with the median market expectation of a 150bps cut. In turn, the TCMB narrowed the overnight rate corridor between the lending and borrowing rates to maintain policy restrictive. The Monetary Policy Committee noted that leading indicators suggested that disinflation has continued through the end of the year amid a more apparent moderation in services inflation. The latest data showed that headline inflation slowed to a 17-month low of 47.09%, but the recent rate of decline has eased. Importantly, the central bank also stated that increased coordination with fiscal policy will be done to transmit a restrictive monetary backdrop.
Published on 2024-12-26

Turkey Holds Rate at 50% as Expected
The Central Bank of Turkey left its benchmark one-week repo auction rate unchanged at 50% for the eighth consecutive decision in its November 2024 meeting, as expected by markets, to hold the borrowing at their highest level since 2002. The Monetary Policy Committee committee noted that the underlying inflation trend has improved according to the latest data. While core goods inflation is stable and services inflation shows improvement, unprocessed food prices remain high due to temporary supply issues. The optimistic rhetoric regarding Turkey’s disinflation process marked a sharp change in the positioning of the central bank compared to prior meetings, driving TCMB watchers to interpret that rate cuts may be on the horizon for the monetary authority. Still, the MPC noted that upside risks to inflation persist and the central bank will prioritize policy to bring back inflation to its target.
Published on 2024-11-21

Turkey Holds Interest Rate at 50%
The Central Bank of Turkey left its benchmark one-week repo auction rate unchanged at 50% for the seventh consecutive decision in its October 2024 meeting, as expected by markets, to hold the terminal rate that lifted benchmark borrowing costs to their highest since 2002. The Monetary Policy Committee noted that underlying inflation trend in Turkey has increased during the end of the third quarter, triggering uncertainty over whether inflation will improve in the near future, as previously expected, and potentially delaying the planned start of rate cuts. Still, the monetary authority also noted that despite upside risks to inflation, other indicators continued to show that Turkey’s aggregate demand continued to slow toward disinflation levels. The latest price data indicated that inflation fell below 50% in September for the first time since July 2023.
Published on 2024-10-17

Turkey Holds Main Interest Rate at 50%
The Central Bank of Turkey left its benchmark one-week repo auction rate unchanged at 50% for the sixth consecutive decision in its August 2024 meeting, as expected by markets, to hold the terminal rate that lifted benchmark borrowing costs to their highest since 2002. The Monetary Policy Committee noted that its assessment of underlying inflation has not changed since its last decision in August, noting that inflation expectations continued to pose an upside risk to price growth, although the slowing domestic demand, partly due to high interest rates, is having a diminishing inflationary impact. Still, the committee noted that it will adjust monetary policy to adapt to a different economic backdrop, contrasting from previous signals that the sole appropriate response to different economic conditions would be a hike. The latest data showed that headline inflation slowed to 52% in July from the 2022-high of 75% in May, a third consecutive slowdown, but well above the target of 5%.
Published on 2024-09-19

TCMB Holds Rate at 50%
The Central Bank of Turkey left its benchmark one-week repo auction rate unchanged at 50% for the fifth consecutive decision in its August 2024 meeting, as expected by markets, to hold the terminal rate that lifted benchmark borrowing costs to their highest since 2002. The Monetary Policy Committee noted that underlying inflation measures in the Turkish economy increased slightly, as expected, but remained below the average from the second quarter amid signs that the restrictive monetary backdrop drove domestic demand to slow. Still, the Committee noted that upside risks to underlying inflation are still present amid geopolitical uncertainty and higher food and services prices, adding that another rate hike will be delivered should an unforeseen deterioration in inflation expectations be observed. The latest data showed that headline inflation slowed to 62% in July from the 2022-high of 75% in the May, well above the target of 5% but marking a second consecutive slowdown.
Published on 2024-08-20

Turkey Holds Interest Rate at 50% as Expected
The central bank of Turkey left its benchmark one-week repo auction rate unchanged at 50% for the fourth consecutive decision in its July 2024 meeting, in line with expectations, to hold the terminal rate that lifted borrowing costs to their highest since 2002. The Monetary Policy Committee noted that underlying inflation measures in the Turkish economy increased slightly, as expected, amid signs that the restrictive monetary backdrop drove domestic demand to slow. Still, the Committee noted that upside risks to underlying inflation are still present amid geopolitical uncertainty and higher food and services prices, adding that another rate hike will be delivered should an unforeseen deterioration in inflation expectations be observed. The latest data showed that headline inflation slowed to 72% in June from the 2022-high of 75% in the previous month, well above the target of 5% but marking the first slowdown since October 2023.
Published on 2024-07-23