- Decision
- Maintain
- Rate change
- 0 bps
- one-week repo auction rate
- 37%
The Central Bank of Türkiye’s Monetary Policy Committee kept the one-week repo auction rate at 37% on July 23, 2026, citing a slight easing in the underlying trend of inflation in June, a temporary rise signalled for July, renewed upward pressure in energy prices amid heightened geopolitical uncertainty, and recent data confirming continued weakness in domestic demand. The decision extended the hold seen since March after a 100 bp cut in January from 38% to 37%, with the policy rate down from 46% in July 2025. The Committee also left the overnight lending and borrowing rates unchanged at 40% and 35.5%, respectively, said tight monetary policy would be maintained until price stability is achieved, and reiterated that liquidity conditions would be closely monitored, with additional macroprudential measures available if unanticipated developments emerge in credit and deposit markets. The Committee said policy would continue to be set to deliver the projected disinflation path and reach the 5% inflation target in the medium term, while closely monitoring the effects of geopolitical developments on inflation through costs, activity and expectations; it said decisions would remain prudent and meeting-by-meeting, and that the stance would be tightened if the inflation outlook deteriorates significantly and persistently.
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.