Turkish Central Bank Interest Rate Cut by Less than Forecast to 37% from 38%
January 22, 2026
As in Hungary, Turkey’s interest rate and inflation experiences this decade epitomize the danger of allowing politicians a voice in monetary policy-making. It rarely ends well. The Central Bank of Turkey‘s interest rate has been as low as 8.5% during much of the first half of 2023 and as high as 50.0% in much of 2024. There have been four interest rate trend reversals since June 2023. CPI inflation went from 14.6% at end-2020 to 85.5% in October 2022, touched 38.2% in mid-2023, roared back to 75.5% in May 2024, and ended last year at 30.9%. As stated in today’s statement from the Central Bank of Turkey following an interest rate cut to 37% from 38%, “The tight monetary policy stance, which will be maintained until price stability is achieved. …The Committee will determine the policy rate by taking into account realized and expected inflation and its underlying trend in a way to ensure the tightness required by the projected disinflation path in line with the interim targets.”
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Central Bank of Turkey
ShareThis
