CBRT Keeps Interest Rate Unchanged: Policy Rate Remains at 37 Percentage

CBRT Keeps Policy Rate at 37%: Strong Tight Stance Maintained Amid Inflation Risks

The Central Bank of the Republic of Türkiye (CBRT) left its policy rate unchanged at 37% in line with market expectations at the Monetary Policy Committee (MPC) meeting held on 11 June 2026. The one-week repo auction rate was kept steady at 37%, while the overnight lending rate remained at 40% and the overnight borrowing rate at 35.5%.

The meeting was chaired by CBRT Governor Yaşar Fatih Karahan and attended by Hatice Karahan, Fatma Özkul, Gazi İshak Kara, Yusuf Emre Akgündüz, and Elif Haykır Hobikoğlu.

In its statement, the Committee noted that inflation, which rose in the early months of the year, accelerated in April due to energy prices, while May showed a limited slowdown in underlying trends. It was emphasized that energy price volatility continues due to global geopolitical developments.

The CBRT also stated that economic activity continues to slow, based on first-quarter data, while leading indicators suggest weak domestic demand persists. The Bank added that it is closely monitoring the impact of geopolitical developments on costs, economic activity, and expectations.

Disinflation Process Emphasized

The MPC statement reiterated that a tight monetary policy stance will be maintained until price stability is achieved. The Committee stressed that the disinflation process will be supported through demand conditions, exchange rate developments, and inflation expectations.

It was also stated that interest rate decisions will depend on inflation realizations, underlying trends, and expectations. The Bank warned that if there is a significant and persistent deterioration in the inflation outlook, tighter monetary policy tools may be used further.

Macroprudential Measures on the Table

The CBRT announced that additional macroprudential measures may be implemented if unexpected developments occur in credit and deposit markets. Liquidity conditions will continue to be closely monitored, and liquidity management tools will be used effectively.

The Committee reiterated that establishing monetary and financial conditions consistent with the medium-term 5% inflation target remains a key priority.

Markets’ Expectations Met

Economic circles had widely expected the CBRT to keep interest rates unchanged due to gradual disinflation and signs of cooling economic activity. The decision aligned with market expectations.

The MPC Meeting Summary will be published within five business days.

Editor’s Note

The CBRT’s decision to keep rates unchanged was not surprising. However, the key takeaway from the statement is the strong reaffirmation that tight monetary policy will continue until a sustained decline in inflation is achieved. Still, maintaining a 37% policy rate while holding a 5% inflation target continues to fuel debates about target realism.

In the current environment of geopolitical uncertainty and rising energy prices, questions remain about whether monetary policy alone is sufficient to combat inflation effectively.

Kaynak: Central Bank of the Republic of Türkiye (CBRT)