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U.S.-based investment bank JPMorgan expects the Central Bank of the Republic of Türkiye (CBRT) to deliver a sharp 300 basis point rate hike in April, arguing that rising energy costs are starting to feed more directly into inflation and reshape the policy outlook.
According to a note released by the bank, policymakers are likely to lift the policy rate from 37% to 40% at the April 22 meeting, framing the move as a response to intensifying pressure from global energy costs as disruptions in the Strait of Hormuz persist amid the Iran war.
While March inflation came in softer than expected, JPMorgan cautioned that the relief may prove temporary. Consumer prices rose 1.9% month-on-month, below the 2.4% forecast, largely due to easing food costs, while annual inflation slipped to 30.9% from 31.5%.
That moderation, however, is unlikely to hold. JPMorgan expects price pressures to rebuild as energy costs gather pace, prompting it to lift its year-end 2026 inflation forecast to 28% from 26.4%.
Geopolitical tensions in the Middle East continue to drive oil prices higher, with fuel acting as a key channel feeding into broader consumer prices.
These pressures are set to become more pronounced in the months ahead, gradually eroding the recent slowdown in headline inflation, the note said.
In March, energy prices rose 4.75%, making it the most elevated category after transport, which is another expenditure directly tied to oil prices. Increases in electricity and natural gas tariffs are likely to deepen the strain, with inflation in this segment projected to approach 39% annually, up from 34.2% in March.
Alongside the near-term hike, JPMorgan also revised its broader rate outlook. It now sees the year-end 2026 policy rate at 34%, up from a previous estimate of 32%.
The bank does not expect rate cuts to begin before July 23, when the policy rate could be lowered back to 37%. Three additional cuts of 100 basis points each by year-end may take effect then, the note said.
Since early March, the central bank has suspended one-week repo auctions and funded the market through overnight lending, having already raised funding costs to 40%. At the March Monetary Policy Committee (MPC) meeting, policymakers paused the ongoing easing cycle, holding the policy rate at 37%.
The next meeting will be held on April 22, 2026.
Governor Fatih Karahan also addressed elevated oil prices as a key driver, indicating that every 10% increase in oil prices lifts headline inflation by about 1.1 percentage points, implying a roughly 5.5 percentage-point increase based on current oil prices around $110 per barrel.
He reiterated that policymakers are committed to maintaining the required tightness to sustain the disinflation process.
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