- Decision
- Lower
- Rate change
- 150 bps
- one-week repo auction rate
- 38%
The Monetary Policy Committee of the Central Bank of Türkiye cut the one-week repo rate by 150 bp to 38 % and lowered the overnight lending and borrowing rates to 41 % and 36.5 %, citing a November inflation outturn below expectations—thanks mainly to food prices—and a modest decline in the underlying inflation trend in October-November, while acknowledging that inflation expectations and pricing behaviour still threaten disinflation. The step extends an easing cycle that has taken the repo rate down from 46 % in April, including a 100 bp reduction in October. The Bank reiterated that its tight monetary stance will remain in place until price stability is secured and said liquidity conditions will be managed actively, with macroprudential tools available to support transmission if credit or deposit markets behave unexpectedly. It noted Q3 GDP growth exceeded forecasts and that Q4 indicators show demand conditions are aiding disinflation, but it will tighten policy if inflation deviates materially from interim targets as it seeks to achieve 5 % inflation in the medium term.
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.