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The Central Bank of the Republic of Türkiye (CBRT) continued its easing cycle Thursday, cutting its key policy rate by 100 basis points to 37% in its first interest rate decision of 2026.
In a statement after its policy meeting, the bank said it “decided to reduce the policy rate (the one-week repo auction rate) from 38% to 37%,” citing a continued slowdown in inflation.
The central bank said the underlying trend of inflation declined in December. It added that while leading indicators point to firmer monthly consumer inflation in January, largely driven by food prices, the increase in the underlying trend “is limited.”
Türkiye’s annual inflation rate slowed to 30.9% in December, marking a fourth consecutive monthly decline and a sharp drop from 44.4% a year earlier, according to official data.
“Indicators for the last quarter point to demand conditions that continue to support the disinflation process, albeit at a moderating pace,” the bank said.
It added that inflation expectations and pricing behavior, while showing signs of improvement, “continue to pose risks to the disinflation process.”
The bank reiterated that it will maintain a restrictive monetary policy stance until price stability is achieved, saying this approach will support disinflation through demand, exchange rate and expectations channels.
To ensure consistency with its disinflation path and interim targets, the bank said it will set the policy rate by considering actual and expected inflation, as well as underlying trends.
“The Monetary Policy Committee will make its policy decisions so as to create the monetary and financial conditions necessary to reach the 5% inflation target in the medium term,” the statement said, adding that decisions will remain “predictable, data-driven and transparent.”
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