Turkey's central bank decided at its monetary policy meeting on the 10th to keep its main policy rate unchanged at 37.0%. This marks the fifth consecutive meeting without a change, and was broadly in line with market expectations. The overnight lending rate and borrowing rate were also left unchanged at 40.0% and 35.5% respectively. In a Reuters poll, 16 of 17 economists expected a hold, while one predicted a 100 basis point cut. Economists expect a total of about 200 basis points of rate cuts at the October and December meetings, and it is widely believed that an easing cycle will begin in October. Turkey's August inflation rate stood at 31.51%, and in its latest inflation report the central bank raised its end-2026 inflation forecast to 28% from the previous 26%.
CBRT held rates at 37.0% but economists expect ~200bp of cuts starting October, implying lower yields ahead.
CBRT held the policy rate at 37.0% for a fifth straight meeting, with an easing cycle expected to start in October, keeping the lira supported near-term.
