Turkish Central Bank holds policy rate steady at 37%

The Central Bank of the Republic of Türkiye announced on Thursday that it has held its policy interest rate—the one-week repo rate—steady at 37%. The bank also maintained the overnight lending rate at 40% and the overnight borrowing rate at 35.5%. In a statement, the bank noted that while the underlying trend of inflation declined in March, leading indicators suggest a slight increase in April. “Amid geopolitical developments and the resulting uncertainties, energy prices remain elevated and exhibit notable volatility,” the bank said.

Economic outlook

The central bank stated that indicators point to a slowdown in economic activity, adding that potential second-round effects of recent developments on the inflation outlook will be of importance. “The tight monetary policy stance, which will be maintained until price stability is achieved, will strengthen the disinflation process through demand, exchange rate, and expectation channels,” the bank added. The decision reflects continued caution as Türkiye navigates global energy shocks and regional conflicts.

Rate trajectory

Starting from a high of 45%, the bank has gradually lowered the rate over the past year, bringing it down to 38% before cutting to 37% in January at the first monetary policy meeting of 2026. Thursday’s hold indicates that policymakers are assessing the impact of previous cuts while remaining vigilant against renewed inflationary pressures. For Türkiye, which imports nearly all its energy, elevated prices remain a key challenge to price stability.