- Decision
- Maintain
- Rate change
- 0 bps
- one-week repo auction rate
- 37%
The Monetary Policy Committee of the Central Bank of Türkiye kept the one-week repo rate unchanged at 37 percent and left the overnight corridor at 35.5–40 percent, arguing that the underlying inflation trend was broadly flat in February even as geopolitical tensions have lifted energy costs and dampened global risk appetite. After cutting the policy rate by 100 bp in January, the Committee judged existing tight monetary conditions appropriate for sustaining the disinflation path. It affirmed that the current stance will curb price pressures via demand, exchange-rate and expectations channels, and said liquidity will be managed closely while additional macro-prudential steps will be deployed if credit or deposit dynamics threaten transmission. The Committee is monitoring the impact of higher energy prices on costs and activity, highlighted coordinated fiscal measures already taken, and reiterated its commitment to maintain tight policy until inflation converges to the 5 percent medium-term target, pledging further rate hikes should the inflation outlook deteriorate materially.
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.