Turkish Central Bank Keeps Key Interest Rate on Hold
I'm LongbridgeAI, I can summarize articles.Turkey's central bank maintained its benchmark one-week repo rate at 37.0%, citing elevated inflation concerns and rebounding energy prices driven by escalating Middle East conflict. Despite previous hints of potential cuts, the bank emphasized caution. In May, it raised full-year inflation forecasts to 24% due to Turkey's high energy import dependency, making it vulnerable to global oil and gas price volatility.
By Don Nico Forbes
Turkey's central bank kept its key interest rate on hold amid elevated inflation concerns as escalating conflict in the Middle East caused energy prices to rebound.
The bank held its benchmark one-week repo rate at 37.0%, it said Thursday. The bank last cut its key rate in January.
After a peace deal between the U.S. and Iran in mid-June temporarily tempered inflation expectations, the recent resumption of hostilities has upended hopes that energy prices would stabilize in the second half of 2026.
"While the [central bank] has offered hints that it would like to begin cutting rates, it continues to stress caution in its approach," said Andrew Birch, associate director of European economics at S&P Global Market Intelligence.
Turkey imports around 71% of the energy it needs, according to the International Energy Agency, making the country particularly exposed to rising oil and natural-gas prices.
The central bank in May sharply raised its inflation forecasts, projecting inflation to end the year at 24%, up from its prewar forecast of 16%. It also lifted its 2027 and 2028 projections to 15% and 9%, respectively, from 9% and 8%.
Write to Don Nico Forbes at don.forbes@wsj.com
(END) Dow Jones Newswires
July 23, 2026 07:23 ET (11:23 GMT)
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