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American investment bank JPMorgan lowered its 2026 year-end policy rate forecast for Türkiye to 35% from 37%, citing a drop in oil prices and recent monetary easing signals from the Turkish central bank.
The bank said it expects the Central Bank of the Republic of Türkiye (CBRT) to cut interest rates by 100 basis points at each of its Monetary Policy Committee meetings on Sept. 10 and Oct. 22.
JPMorgan said the expected cuts would bring the policy rate to 35% by the end of the year.
The bank pointed to falling energy prices and the CBRT's recent pro-easing verbal guidance as reasons for the revised forecast.
JPMorgan said the downward revision was based mainly on the sharp decline in oil prices following the ceasefire announced after the war in Iran, as well as recent monetary easing messages from the CBRT.
In its assessment, the bank said the CBRT is expected to restart weekly repo auctions next month.
JPMorgan said such a move could lower the effective funding rate to 37% from 40%.
The bank's analysts said the central bank is likely to cut rates by 100 basis points in both September and October in line with lower energy prices and easing signals from the CBRT.
The CBRT left its policy rate unchanged in its last three Monetary Policy Committee meetings.
The bank had lowered the policy rate to 37% with a 100-basis-point cut in January.
After the start of the war in the Middle East, the central bank kept rates unchanged at its meetings in March, April and June.
Following the war, the CBRT began funding the market through the overnight lending rate at around 40%.
The central bank's next steps are being closely watched by markets.
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