Turkey Economics and Macro Strategy: CBT Review: A Refined Balance

Research evidence excerpt

Turkey Economics and Macro Strategy: CBT Review: A Refined Balance

Update

June 11, 2026 01:41 PM GMT

Morgan Stanley & Co. International plc+MTurkey Economics and Macro Strategy | EEMEA Georgi Deyanov

Economist

CBT Review: A Refined Balance Georgi.Deyanov@morganstanley.comArnav Gupta +44 20 7425-7006

Strategist

Arnav.Gupta@morganstanley.com +44 20 7677-0382

The CBT remained on hold, cautiously shifting towards a refined

balance between weaker economic growth and pro-inflationary Exhibit 1 : We continue to expect the CBT to

risks. We still see the policy rate at 35% at year-end, with upside remain cautious in the near term but eventually

risks. We close our 1Y TRY OIS payer and maintain a short USD/ to resume easing later this year

TRY position in the 3‑month tenor. 90 Policy rate Headline CPI, %Y

85.5% 75.4% MS forecast 80

Economics | Demand weakness increasingly offsetting risks for second-round 7060

effects on inflation: The CBT kept its key policy rate unchanged at 37%, in line with 50

our expectations and consensus. The statement noted that, after rising earlier this 30 38.2%

year and in April, the underlying trend of inflation decreased slightly in May. 10

Forward guidance remained unchanged. The central bank reiterated its meeting-by- 0 2021 2022 2023 2024 2025 2026 2027

meeting approach and readiness to tighten monetary conditions in the event of a Source: Haver Analytics, Morgan Stanley Research forecasts

significant and persistent deterioration in the inflation outlook. The MPC continues

to focus particularly on upside risks to the inflation outlook. The statement brought

some changes to the growth and inflation narrative. These changes suggest to us

that the CBT is increasing the weight of domestic demand weakness in its reaction