Central Bank of Türkiye holds policy rate at 37%, overnight lending rate at 40%

The Monetary Policy Committee, chaired by Central Bank of Türkiye Governor Fatih Karahan, kept the policy rate at 37% and the overnight borrowing rate at 35.5%. The announcement pointed to a decline in the underlying trend of inflation and noted that high energy prices posed an upside risk.

Scraper SystemSeptember 10, 2026, 10:20 PM

Central Bank of Türkiye holds policy rate at 37%, overnight lending rate at 40%

The Monetary Policy Committee, which met under the chairmanship of Central Bank of Türkiye Governor Fatih Karahan, decided to keep the policy rate unchanged at 37%. The Committee left the overnight lending rate at 40% and the borrowing rate at 35.5%.

The decision text stated that, despite monthly fluctuations, recent inflation figures and leading indicators pointed to a decline in the underlying trend of inflation. It said that economic activity data and the limited pass-through of supply shocks to domestic prices confirmed the weak course of domestic demand.

The Committee noted that energy prices, which remained elevated due to geopolitical developments, posed an upside risk to the inflation outlook. The decision thus conveyed that the cautious stance of monetary policy was being maintained.

Analysts assess the interest rate decision

AA Finans analyst and economist Haluk Bürümcekçi said that the decision to keep interest rates in line with expectations was a neutral development for the Turkish lira. Bürümcekçi stated that the Central Bank of Türkiye continued to keep the upper limit of the interest rate corridor asymmetrically high against risks.

Bürümcekçi said that the limited pass-through of supply shocks to domestic prices, due to weak domestic demand, supported disinflation. He said the cautious stance had been maintained because the decision text drew attention to risks arising from energy prices, adding that the message that the current monetary policy stance would continue for some time had been reiterated.

Bürümcekçi said there had been no changes to the macroprudential framework or messages concerning liquidity, adding that the Central Bank of Türkiye had chosen not to provide a clear signal about the next meeting due to global uncertainties. He assessed that, if global energy prices improved, there could be room for a limited interest rate cut of up to 200 basis points during the remainder of the year.

Bürümcekçi said global developments, the inflation outlook and reserve movements would be monitored until the Monetary Policy Committee meeting on October 22. He noted that the median year-end policy rate expectation had risen to 35% in the latest surveys.

Kutay Gözgör, director of research at Kuwait Türk Investment, said the decision text contained more positive language on the inflation outlook and more cautious language on domestic demand compared with the previous meeting.

Gözgör said the continued weakness in domestic demand meant that demand conditions were supporting the disinflation process. He added that limited demand-driven pressures on inflation were supportive from a monetary policy perspective.

Gözgör said the absence of any change in forward guidance indicated that the cautious stance had been maintained, adding that interest rate decisions would be determined on a data-driven basis, taking inflation outcomes, the underlying trend and expectations into account.

Gözgör assessed that, if the inflation outlook remained intact, the policy rate could be reduced to 35% by year-end through 100-basis-point cuts at the October and December meetings. He said the statement that monetary policy would be tightened if a lasting deterioration occurred in the inflation outlook had been retained in the decision text.

Central Bank of Türkiye holds policy rate at 37%, overnight lending rate at 40%