Turkey Cuts Policy Rate to 36% as Expected

2026-10-22 11:06 By Agna Gabriel 1 min. read

Turkey’s central bank cut its one-week repo rate by 100 basis points to 36% from 37%, lowering its overnight lending and borrowing rates by the same amount to 39% and 34.5%, respectively, as expected.

The Monetary Policy Committee said recent inflation data and leading indicators continued to signal a downward trend, while economic activity pointed to persistently weak domestic demand.

However, elevated energy prices amid ongoing geopolitical tensions remain a source of upward inflationary pressure.

The bank reiterated its commitment to maintaining tight monetary conditions until price stability is achieved, supporting disinflation through demand, exchange rate and expectations channels.

Future rate decisions will depend on inflation trends, expectations and progress toward interim targets, with adjustments made cautiously at each meeting.

The committee warned that a significant and sustained deterioration in the inflation outlook could prompt monetary tightening.



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Turkey Cuts Policy Rate to 36% as Expected
Turkey’s central bank cut its one-week repo rate by 100 basis points to 36% from 37%, lowering its overnight lending and borrowing rates by the same amount to 39% and 34.5%, respectively, as expected. The Monetary Policy Committee said recent inflation data and leading indicators continued to signal a downward trend, while economic activity pointed to persistently weak domestic demand. However, elevated energy prices amid ongoing geopolitical tensions remain a source of upward inflationary pressure. The bank reiterated its commitment to maintaining tight monetary conditions until price stability is achieved, supporting disinflation through demand, exchange rate and expectations channels. Future rate decisions will depend on inflation trends, expectations and progress toward interim targets, with adjustments made cautiously at each meeting. The committee warned that a significant and sustained deterioration in the inflation outlook could prompt monetary tightening.
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Turkey Holds Interest Rate at 37%
The Central Bank of the Republic of Turkey maintained its benchmark overnight lending rate at 37% for the fifth straight decision in its September 2026 meeting, as expected by markets. Then central bank noted that despite recent volatility in financial markets and the turbulent backdrop of the global macroeconomy, leading indicators suggested that the underlying inflation trend has moderated since the last meeting in June. On the other hand, the surging energy prices due to fresh escalation in the Iran-US war heightened inflationary risks, preventing any signals to warrant eased financial conditions or a favorable backdrop for the lira and overall emerging market currencies. The bank also nodded at defending the lira's stability, which was tested in May after Turkish courts removed the country's opposition leader Ozel, and previously prompted tweaks in the monetary framework to force commercial banks on higher funding rates.
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Turkey Holds Rate at 37% as Expected
The Central Bank of the Republic of Turkey maintained its benchmark overnight lending rate at 37% for the fourth straight decision in its July 2026 meeting, as expected. The central bank noted that the trend of underlying inflation eased slightly in June, although leading indicators pointed to a rebound in July that maintains inflationary risks in the Turkish economy. The rebound in price trends was consistent with other Asian economies as global energy prices retested their peaks following the escalation of the war in the Middle East. Meanwhile, data tracked by the TCMB pointed to slowing domestic demand. The bank reiterated that interest rates will remain restrictive until price stability is achieved, pushing back against any sign of accommodation to growth risks. The bank also nodded at defending the lira's stability, which was tested in May after Turkish courts removed the country's opposition leader Ozel.
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