The Turkish Central Bank (TCMB) announced on Thursday an interest rate cut of 150 basis points from 39.5% to 38%, after noting a marked improvement in inflation in November, which came in lower than expected due to changes in food prices.
In a statement issued to argue for its decision, the TCMB said the central bank’s board of directors, chaired by Yaşar Fatih Karahan, also decided to cut the overnight lending rate from 42.5% to 41%, and the overnight borrowing rate from 38% to 36.5%, Turkish news agency Anatolia reported.
The Central Bank noted in the statement that core inflation declined slightly in October and November – with CPI falling to a four-year low – after a rebound in September. In addition, economic growth in the third quarter exceeded market expectations, while indicators for the fourth quarter suggest that “demand conditions will continue to support the disinflation process”.
“The risk to disinflation persists, although inflation expectations and pricing behaviours show signs of improvement,” the Central Bank said, adding that the tight monetary policy, which will be maintained until price stability is achieved, “will strengthen disinflation through demand, the exchange rate and expectations.”
The Turkish Central Bank concluded by saying that “the Board of Directors will determine the steps to be taken on interest rates in a manner consistent with the intermediate targets, taking into account the evolution of inflation, its main trend and forecasts, ensuring the necessary restraint for disinflation“. The next meeting of the Monetary Policy Committee of the TCMB – at which further rate cuts could be announced – will be held on 22 January 2026.
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Edited and reviewed by:
Pablo Gómez is a specialist in Turkey and has been editor-in-chief of Hispanatolia since 2011. He has been analysing current affairs and geopolitics in Turkey and the surrounding region since 2006.
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