Türkiye: Middle East re-escalation delays CBRT easing

Research evidence excerpt

Türkiye: Middle East re-escalation delays CBRT easing

J P M O R G A N Europe Economic Research

23 July 2026

Türkiye: Middle East re-escalation

delays CBRT easing

EM, Economic and Policy Research

Fatih Akcelik

(44 20) 3493 7285

fatih.akcelik@jpmorgan.com

Emerging Markets Strategy

• CBRT kept the one-week repo rate on hold at 37% and the overnight Michael Harrison AC

lending rate at 40%, in line with market expectations (44-20) 7134 5720

michael.p.harrison@jpmorgan.com

• CBRT highlighted the recent rise in energy prices driven by geopolitical J.P. Morgan Securities plc

developments, alongside upside risks to the inflation outlook and higher

(albeit temporary) inflation momentum in July CPI

• Prior to the Middle East re-escalation, we had anticipated that the CBRT

would resume one-week repo auctions at 37%, but we now regard this as

unlikely until the September MPC

• We have revised our rate-cut expectations and now anticipate 100bp cuts

at the October and December MPC meetings (previously September and

October)

• We maintain our end-2026 policy rate forecast at 35%, with risks skewed

toward fewer cuts, contingent upon the duration and intensity of the

Middle East conflict

• Local Markets Strategy: Hold TRY OIS steepeners (receive Dec26 MPC

OIS, pay 2y1y OIS – entry: -520bp, current: -473bp, target: -400bp,

review: -580bp, total return: +47bp) and short 03-Aug-26 USDTRY fwd

(entry: 48.66, current: 47.42, target: 47.70, review: 49.25, total return:

+2.21%) after on-hold CBRT

The CBRT kept the one-week repo rate on hold at 37% and the overnight

lending rate at 40%, in line with the Bloomberg consensus and our

expectations (Figure 1). In its MPC statement, the CBRT highlighted the recent

rise in energy prices driven by geopolitical developments, alongside upside risks