The Central Bank of Türkiye published the summary of its Monetary Policy Committee meeting and reduced the one-week repo auction rate by 100 basis points to 37%, alongside a 100 basis point cut in its overnight interest rate corridor. The Committee reiterated that it will maintain a tight monetary policy stance until price stability is achieved, calibrating decisions meeting by meeting with a focus on the inflation outlook. The overnight lending rate was lowered from 41% to 40% and the overnight borrowing rate from 36.5% to 35.5%. December consumer inflation was 0.89% month on month and annual inflation ended 2025 at 30.89%, while the Bank’s indicators pointed to a decline in the underlying trend of inflation to 1.9% on three-month averages; leading indicators suggested January inflation would firm mainly on food prices, with a limited increase in the underlying trend. Inflation expectations in the January Survey of Market Participants edged down, including year-end 2026 at 23.2% and 12-month-ahead at 22.2%. The Committee said it would tighten policy if the inflation outlook deviates significantly from interim targets and may deploy additional macroprudential measures if unanticipated developments in credit and deposit markets impair transmission, while continuing to monitor liquidity conditions closely.
Central Bank of Türkiye 2026-01-29
Central Bank of Türkiye cuts policy rate to 37% and lowers overnight corridor rates
The Central Bank of Türkiye reduced the one-week repo auction rate by 100 basis points to 37% and adjusted the overnight interest rate corridor, maintaining a tight monetary policy stance until price stability is achieved. The Committee noted a decline in the underlying inflation trend and stated it would tighten policy if inflation deviates from targets, with potential additional macroprudential measures if needed.