The Central Bank of the Republic of Türkiye has held its policy rate at 37.0% for a fifth consecutive meeting, extending a pause in its interest rate cycle. The decision, announced on 10 September 2026, keeps the interest rate corridor unchanged at 35.5% to 40.0%, the bank said in its statement.
The CBRT said recent inflation data suggested that the underlying trend was decelerating. It added that data on economic activity and the limited pass-through of supply shocks to domestic prices confirmed the weakness in domestic demand, while elevated energy prices amid geopolitical developments posed an upward risk to the inflation outlook.
LIQUIDITY MANAGEMENT
On 23 August the bank announced it would resume one-week repo auctions, which had been suspended since 1 March 2026, bringing banks' funding back to the 37% policy rate from the 40% overnight lending rate.
The resumption of one-week repo auctions lowered banks' effective funding cost from the 40% overnight lending rate to the 37% policy rate, a decline of 300 basis points, according to ING.
The interest rate corridor at 35.5% to 40.0% defines the outer bounds within which the CBRT operates its short-term liquidity management.
The one-week repo auction rate is the CBRT's policy rate, and the resumption of the auctions, announced on 23 August, restored a mechanism that had been suspended since 1 March 2026, when the bank funded the market at the higher overnight lending rate. According to ING, the move took the effective cost of funding and the TLREF overnight reference rate directly down to the 37% policy rate.
INFLATION AND OUTLOOK
Annual inflation eased to 31.5% in August from 31.8% in July, according to ING. The bank said monetary policy decisions are made prudently on a meeting-by-meeting basis with a focus on the inflation outlook.
The Committee said it would set the policy rate taking into account realised and expected inflation and its underlying trend, and that the tight monetary policy stance would be maintained until price stability is achieved.
With the policy rate held at 37% for a fifth consecutive meeting and the interest corridor unchanged at 35.5% to 40.0%, the CBRT has kept its headline rates steady, while the one-week repo auctions it resumed in late August have brought effective funding costs down to the policy rate.