Türkiye: Central Bank Holds Interest Rate at 37% Amid Persistent Inflation Risks
Türkiye’s central bank has kept its benchmark one-week repo rate unchanged at 37%, maintaining the rate at its current level as policymakers assess continued inflation and energy-price risks.
The decision comes as higher global energy prices create additional pressure on Türkiye’s inflation outlook. The country relies heavily on imported energy, making the recent rise in oil prices particularly important for domestic prices and the Turkish lira. The central bank has previously raised its 2026 year-end inflation forecast to around 28%.
The decision to maintain the 37% rate reflects the central bank’s cautious approach to monetary policy. Although inflation has been slowing, policymakers remain concerned that higher energy and commodity prices could interrupt the disinflation process.
Türkiye is also pursuing investment and technology initiatives. The government says it wants to strengthen the country’s position as a manufacturing, logistics and research hub connecting Europe, Asia and the Middle East. Authorities are also targeting increased public investment in artificial-intelligence projects.
At the same time, Ankara is expanding cooperation in the defence sector. Türkiye’s defence company MKE and Poland’s PGZ recently signed an agreement covering cooperation on short-range air-defence systems and other technologies.
The combination of high inflation, expensive imported energy and ambitious investment plans will remain important factors for Türkiye’s economy in the months ahead.
