MediumIV Macro Policy & Sovereign Debt10 September 2026, Thursday

CBRT holds its policy rate at 37%, leaving the door open to tightening against energy-driven risk

The central bank stressed that the underlying trend has declined, but that geopolitical developments are creating upside risk through energy prices.

The Monetary Policy Committee of the Central Bank of the Republic of Türkiye left the one-week repo rate unchanged at 37% on 10 September; the overnight lending and borrowing rates also remained at 40% and 35.5%. The last cut was made on 22 January, when the rate was lowered from 38% to 37%. Most sources count the decision as the fifth hold of the year, while one source reports it as the sixth.

The decision text noted that the underlying trend of inflation has declined, but that rising energy prices pose an upside risk, and stressed readiness for additional tightening if the outlook deteriorates markedly. The next meeting is on 22 October. On the same day the 10-year benchmark yield rose to 31.87%.

Talay assessment

Bottom line

Despite improvement in the underlying trend, the CBRT kept its pause by highlighting upside risk from energy prices and left the door open to tightening. A rate at 37% with only one cut since January shows the bank will not ease until the geopolitical energy shock passes. Holding again on 22 October is the most likely path; a return to cuts depends on energy prices calming, and further tightening on a marked deterioration in the outlook.

Likely effects

Credit conditions and growthNegative1–6 months
Keeping the policy rate at 37% for an extended period keeps borrowing costs high, continuing to restrain domestic demand and investment. SMEs dependent on credit and the construction sector are the most strained in this environment.
Lira rates marketUncertainWeeks
The 10-year benchmark yield rising to 31.87% after the decision shows the market scaling back expectations of near-term cuts. The tightening bias raises sensitivity to energy-price news flow.
Inflation expectationsPositive1–6 months
Stating openly a readiness to tighten against the energy shock aims to limit price adjustments becoming embedded in expectations. This stance supports the credibility of the disinflation process.

Possibilities, ranked

1
Rate held on 22 October70%
Energy prices stay elevated and the underlying trend improves gradually; the MPC keeps its cautious language and leaves the rate at 37%.
Watch: September inflation due in early October, the path of Brent crude and the year-end expectation in the market participants survey.
2
Return to cuts20%
Energy prices fall and monthly and services inflation slow markedly; the MPC restarts easing with a measured cut.
Watch: A marked slowdown in monthly inflation and removal of the tightening bias from the decision text.
3
Further tightening10%
A new spike in energy prices and deteriorating expectations push the MPC towards a rate hike or corridor adjustment.
Watch: A sharp rise in inflation expectations and a new sustained jump in Brent.

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

TR 10Y▲ 31.87%

Historical context