Türkiye’s central bank lowered its policy rate by one percentage point to 36 percent, its first cut in nine months. The decision matched the median forecast in an economist survey cited by Mynet. The bank said underlying inflation was easing but energy prices remained a risk, and further moves would depend on the inflation outlook at each meeting.
Economics & Markets··Evening
The first cut in nine months brings the rate to 36 percent
The Central Bank of the Republic of Türkiye lowered its one-week repo auction rate from 37 percent to 36 percent on October 22. The move followed September’s decision to leave the rate unchanged and was the first reduction in nine months. The overnight lending rate also fell from 40 percent to 39 percent, while the overnight borrowing rate declined from 35.5 percent to 34.5 percent.[1], [2]
The decision matched the median forecast in the AA Finans survey cited by Mynet. Of its 20 economists, 19 expected a 100-basis-point reduction, and one expected a 200-basis-point cut. Their median year-end policy-rate forecast was 35 percent. Those survey answers describe economists’ expectations, alongside the 36 percent rate the committee actually set at this meeting.[2]
Easing inflation meets persistent energy risks
The Monetary Policy Committee said recent inflation readings and leading indicators confirmed a decline in the underlying trend despite monthly fluctuations. It judged that economic activity figures and the limited pass-through of supply shocks to domestic prices pointed to continuing weakness in domestic demand. Energy prices remained high amid geopolitical tensions, keeping upward inflation risks in place.[1]
The bank said it was monitoring geopolitical developments through their effects on costs, activity and expectations. It would maintain tight monetary policy until price stability was achieved. Governor Yaşar Fatih Karahan chaired the meeting for announcement 2026-45. Other participants were Hatice Karahan, Fatma Özkul, Gazi İshak Kara, Yusuf Emre Akgündüz and Elif Haykır Hobikoğlu.[1]
Further decisions depend on the inflation outlook
The size and timing of further rate steps will be set cautiously at each meeting, taking inflation outcomes, the underlying trend and expectations into account. The committee retained the option of tightening in response to a significant and lasting deterioration in the inflation outlook. It retained the medium-term inflation target of 5 percent, seeking monetary and financial conditions consistent with that goal, and committed to data-driven and transparent decisions.[1]
Unexpected changes in credit or deposit markets could bring additional macroprudential measures to support monetary transmission. Liquidity conditions will remain under review, with liquidity-management tools available. The bank said the meeting summary would be published within five working days.[1]
