Turkish Central Bank Holds Rate at 37 Percent
The decision was in line with forecasts from an Anadolu survey. The bank last moved rates in January, when it trimmed its one-week repo auction rate by one percentage point from 38 percent to 37 percent. Overnight lending and borrowing rates were also held steady at 40 percent and 35.5 percent, respectively.
The bank noted that the underlying trend of inflation — which had picked up in April partly due to higher energy costs — eased slightly in May. It cautioned, however, that the broader energy price environment remains a source of concern.
"Amid geopolitical developments and the resulting uncertainties, energy prices remain volatile and elevated," the bank said.
On the growth front, the committee acknowledged that first-quarter data pointed to a deceleration in economic activity, with leading indicators continuing to signal weakness in domestic demand. It said it was closely tracking the spillover effects of geopolitical developments on inflation through cost pressures, economic activity, and market expectations.
"The impact of geopolitical developments on the inflation outlook through the cost channel, economic activity and expectations is closely monitored," the bank added.
The committee reaffirmed its commitment to maintaining a tight monetary policy stance until price stability is durably achieved, describing the approach as essential to reinforcing the disinflation process through demand, exchange rate, and expectations channels. It added that future rate decisions would be calibrated to ensure the degree of monetary tightness required by the projected disinflation path.
"In case of a significant and persistent deterioration in the inflation outlook, monetary policy stance will be tightened," the bank warned.
Policymakers also pledged to monitor liquidity conditions closely and deploy liquidity management tools as needed, with the broader medium-term objective of bringing inflation down to a 5 percent target.
Türkiye's annual inflation stood at 32.61 percent in May, edging up from 32.37 percent in April, while monthly consumer prices rose 1.71 percent over the same period.
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