Turkish Central Bank Interest Rate Cut to 39.5% – Currency Thoughts

Turkish Central Bank Interest Rate Cut to 39.5%

October 23, 2025

A one-percentage point reduction of the Central Bank of Turkey‘s 1-week repo rate to 39.5% today is also aligned with market expectations. The rate had been as high as 50% from March 2024 though January of this year. But today’s rate drop was smaller than ones of 250 basis points last month and 300 bps in July. Turkish CPI inflation last month printed at a higher-than-forecast 33.3%, and officials reacted to other unwelcome developments.

While recent data suggest that demand conditions are at disinflationary levels, they also point to a slowdown in the disinflation process. The risks posed by recent price developments, particularly in food, to the disinflation process through inflation expectations and pricing behavior have become more pronounced.

Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: Central Bank of Turkey

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on Thursday, October 23rd, 2025 at 7:01 am and is filed under Central Bank Watch.
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