22.04.202611:07:01UTC+00Turkey Holds Policy Rate at 37% as Expected

The Central Bank of Turkey left its key policy rate unchanged at 37%, in line with expectations, and also kept the overnight lending rate at 40% and the borrowing rate at 35.5%. The bank noted that underlying inflation eased in March, but said early data point to a slight rebound in April. It highlighted that energy prices remain high and volatile due to geopolitical risks, which adds uncertainty to the inflation outlook.

Although there are signs that economic activity is slowing, the bank cautioned that recent developments could still feed into inflation through higher costs and shifting expectations. It reaffirmed that its tight monetary stance will be maintained until price stability is secured, emphasizing its strategy of supporting disinflation through demand management, the exchange rate, and inflation expectations.

The central bank also reiterated its readiness to tighten policy further if inflation deteriorates. It said it will continue to closely monitor liquidity conditions and financial stability risks as it works toward its medium-term inflation target of 5%.