CEEMEA Blog: Türkiye (CBT): External headwinds delay easing

Research evidence excerpt

CEEMEA Blog: Türkiye (CBT): External headwinds delay easing

Deutsche Bank

Research

Emerging Europe Strategy Date

Turkiye 23 July 2026

CEEMEA Blog

Türkiye (CBT): External headwinds delay

easing

Yigit Onay

In line with our expectations and market consensus, the CBT left its policy

Economist

framework unchanged at the July MPC meeting, keeping the one-week repo rate +44-20-75410227

at 37% and the interest-rate corridor at 35.5%-40.0%. This marks the fourth

consecutive meeting with no formal changes in interest rates since the Bank

suspended one-week repo auctions in early March and shifted funding to the upper

bound of the corridor, leaving the effective funding rate at 40%.

The decision reflects a more challenging external backdrop. Rising geopolitical

tensions, higher energy prices, waning contribution from fiscal policy on

disinflation and the resulting deterioration in the inflation outlook have likely

reinforced the CBT’s preference to maintain the current degree of tightness despite

the ongoing weakness in domestic demand. At the same time, the absence of

renewed pressure on FX reserves, limited portfolio outflows and still-contained

domestic dollarisation remove the need for an outright tightening via a hike in the

one-week repo rate to current effective funding rate (40%). Overall, the current

funding configuration appears sufficient for the CBT to stay in wait-and-see mode

and preserve policy flexibility while avoiding a premature return to the policy rate.

The statement remained broadly unchanged, with revisions concentrated in the

sections on inflation, growth and energy prices. On the relatively optimistic side

for inflation, the CBT highlighted the moderation in underlying inflation in June and

characterised the July acceleration as temporary.