The Turkish Central Bank has kept its policy rate unchanged at 37 percent, as the markets expected, extending its monetary policy pause for a fourth consecutive meeting.
The bank’s Monetary Policy Committee said on Thursday the underlying trend of inflation decreased slightly in June, while recent data confirmed an ongoing weakening in domestic demand.
In June, Türkiye’s annual consumer inflation eased to 32.11 percent, slightly below market expectations, as monthly price increases remained limited amid slower energy-linked pressure. The consumer price index (CPI) rose 0.99 percent every month.
The bank said it is closely monitoring the effects of geopolitical developments on inflation through higher costs, economic activity and expectations.
The committee maintained the overnight lending rate at 40 percent and the overnight borrowing rate at 35.5 percent.
The bank said its tight monetary policy stance would be maintained until price stability is achieved, supporting the disinflation process through demand, exchange-rate and expectation channels.
Policy decisions will continue to be made prudently on a meeting-by-meeting basis, taking into account realised and expected inflation and its underlying trend, it added.
The committee reiterated that it remains highly attentive to upside inflation risks and said monetary policy would be tightened in the event of a significant and persistent deterioration in the inflation outlook.
The bank reduced its policy rate by 100 basis points from 38 percent to 37 percent in January. It subsequently held the rate unchanged at its meetings in March, April and June.
The January reduction followed cumulative cuts of 800 basis points during the second half of 2025, which brought the policy rate down from 46 percent to 38 percent by December.
The central bank said it would continue using macroprudential measures and liquidity-management tools when necessary to support monetary transmission.
