Turkey’s Central Bank decided on Thursday to leave its benchmark one-week repo rate unchanged at 37%, thus adopting a conservative stance and a decision in line with market expectations, in a context of growing economic uncertainty linked to the war in Iran and rising oil prices.
The Turkish Central Bank also left the overnight lending rate unchanged at 40% and overnight borrowing rates at 35.5%, the Anatolia news agency reported. The forecasts of most analysts surveyed in fact pointed to the central bank opting to leave rates unchanged in the face of recent events and the intensification of the war in the Middle East.
In a statement, the institution explained that “As uncertainty over geopolitical developments increased, global risk appetite deteriorated and energy prices rose”, adding that it acted to “contain the risks that these factors pose to the inflation outlook“. Turkey’s year-on-year CPI rose slightly to 31.5% in February, while the monthly rate moderated to 2.96% from a 4.84% increase in January, according to the latest official data released earlier this month by the Turkish Statistical Institute.
Before the conflict with Iran altered expectations, markets had expected the Central Bank of Türkiye to continue the cycle of rate cuts that began in late 2024; from a benchmark rate of 45%, the institution reduced it to 38% throughout 2025 and made a final rate cut in January, leaving it at 37%.
The next meeting of the Monetary Policy Committee, in charge of setting the price of money in the Eurasian country, is scheduled for 22 April, when the Central Bank of Turkey will reassess the evolution of the Turkish economy and the inflation outlook.
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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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