Ankara – The Central Bank of the Republic of Turkey decided in its meeting today, Wednesday, to keep the main interest rate unchanged at 37%, aligning with market expectations. The bank explained that the decision reflects caution regarding developments from the Iran war and global energy price disruptions. Accordingly, Turkey’s economic stability in 2026 is a top priority for the Central Bank, which emphasized the need to maintain a tight monetary policy to absorb price shocks resulting from rising oil and gas import costs.
Monitoring Inflation Risks: Why Did Turkey Pause Rate Cuts?
The Monetary Policy Committee warned that regional tensions could push inflation into an upward trajectory during April, especially after a slight increase in core indicators. Obviously, the bank prefers to wait and see to ensure price stability amid international uncertainty. As a result, overnight interest rates remained high (40% for lending and 35.5% for borrowing) to control inflation rates, which neared the 31% mark last month.
Market Outlook: Will Ankara Resume the Easing Cycle Soon?
Despite the ceasefire extension announced by President Trump, analysts do not expect any rate cuts before next September. Certainly, the decision depends entirely on the stabilization of geopolitical conditions and a significant decline in inflationary pressures. Accordingly, Turkey’s economic stability in 2026 remains contingent on the monetary policy’s ability to protect the national currency and stabilize domestic markets against the violent external fluctuations imposed by regional crises.
