- Decision
- Maintain
- Rate change
- 0 bps
- one-week repo auction rate
- 46%
The Central Bank of Türkiye’s Monetary Policy Committee kept the one-week repo rate unchanged at 46.0 %, with the overnight corridor left at 44.5–49 %, citing a continued decline in the underlying inflation trend through May and early June and evidence of a second-quarter slowdown in domestic demand, even as expectations and pricing behaviour still threaten the disinflation path. After trimming the policy rate from 47.5 % in January to 42.5 % in March and lifting it to 46 % in April, the Committee sees the current tight stance reinforcing disinflation via softer demand, real lira appreciation and improving expectations. The statement flags readiness to deploy additional macro-prudential tools if credit or deposit market conditions impede transmission, and says liquidity will be actively managed. Potential headwinds from geopolitical tensions and rising global trade protectionism are being monitored, while fiscal-policy coordination is expected to bolster the effort to reach the 5 % medium-term inflation target. Policymakers reaffirm that the policy rate will be set “meeting-by-meeting” to preserve the required tightness and that all instruments will be used decisively should a “significant and persistent” deterioration in inflation emerge.
Rate evolution
From June 2025 to April 2026, the policy rate fell by 900 basis points from 46% to 37%, after an initial hold, through successive cuts before the Committee paused in March and April 2026 and held the rate through July 2026 and in its latest decision. The reductions were driven by an overall softer underlying inflation trend and demand conditions judged to be disinflationary, while the Committee said tight monetary conditions, Turkish lira appreciation and improving inflation expectations would support disinflation, even as food prices, service items with high inertia, inflation expectations and pricing behaviour remained risks and external uncertainty was initially monitored mainly through geopolitical developments and trade protectionism.
In the later decisions, the Committee kept the rate at 37% as geopolitical uncertainty intensified and energy prices remained elevated, while recent inflation figures and leading indicators suggested that the underlying trend of inflation was decelerating despite monthly fluctuations. Data on economic activity and the limited pass-through of supply shocks to domestic prices confirmed weak domestic demand, but elevated energy prices posed an upward risk to inflation. The Committee reiterated that policy would remain tight until price stability is achieved, that it remained highly attentive to upside inflation risks and that it stood ready to tighten in case of a significant and persistent deterioration in the inflation outlook.