12.03.2026 14:36
The Monetary Policy Committee of the Central Bank of the Republic of Turkey kept the policy interest rate unchanged at 37 percent. The Central Bank stated that uncertainties have increased due to geopolitical developments, and a deterioration in global risk appetite and a rise in energy prices have been observed. Thus, the 9-month interest rate reduction process has been paused.
The Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee (MPC) announced the policy interest rate, which is the one-week repo auction interest rate.
9-MONTH DISCOUNT PROCESS HAS STOPPED
The Central Bank kept the policy interest rate stable at 37%. Thus, the 9-month interest rate reduction process has been paused.
In the CBRT decision text, it was stated: "The Monetary Policy Committee (Committee) has decided to keep the one-week repo auction interest rate, which is the policy interest rate, at 37%. The Committee also kept the overnight lending interest rate at 40% and the overnight borrowing interest rate at 35.5%."
ATTENTION WAS DRAWN TO ENERGY PRICES
The text mentioned that the main trend of inflation remained close to flat in February, with the following statements:
"As uncertainties increase due to geopolitical developments, a deterioration in global risk appetite and a rise in energy prices have been observed. To limit the risks that these factors may create on the inflation outlook, decisions supporting a tight monetary policy and fiscal measures in coordination have been taken. The effects of geopolitical developments on the inflation outlook through the cost channel and economic activity are being closely monitored.
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 Committee will determine the steps to be taken regarding the policy interest rate in a way that ensures the tightness required for disinflation in line with intermediate targets, taking into account inflation realizations, the main trend, and expectations. Monetary policy decisions are made with a focus on the inflation outlook, on a meeting basis, and with a cautious approach. If there is a significant and persistent deterioration in the inflation outlook due to recent developments, the monetary policy stance will be tightened.
If there are developments in the credit and deposit markets that are outside expectations, the monetary transmission mechanism will be supported by additional macroprudential steps. Liquidity conditions will be closely monitored, and liquidity management tools will continue to be used effectively.
The Committee will determine its policy decisions in a way that will provide the monetary and financial conditions to achieve the inflation target of 5% in the medium term. The Committee will make its decisions within a predictable, data-driven, and transparent framework."
EXPECTATIONS WERE ALSO TOWARDS STABILITY
In a survey conducted by Anadolu Agency Finance with 38 economists, 37 economists expressed the opinion that the interest rate would remain unchanged. Only 1 economist voted for a 50 basis point reduction.
Before the Iran war began, predictions regarding the interest rate decision were limited but indicated a potential reduction. However, the increase in oil prices changed expectations.
INTEREST RATE WAS REDUCED BY 100 BASIS POINTS IN JANUARY
The Central Bank had decided to reduce the interest rates from 38% to 37% in January.
The Committee also reduced the overnight lending interest rate from 41% to 40% and the overnight borrowing interest rate from 36.5% to 35.5%.
THE NEXT MEETING WILL BE ON APRIL 22
The Central Bank will hold its next meeting on April 22, 2026.