Turkey Rates and the CBRT: Lira, Reserves, Inflation — 2026-09-16

Top developments

CBRT Maintains 37% Policy Rate Amid Oil Shock Risks

On September 10, 2026, the Monetary Policy Committee (PPK) kept the one-week repo policy rate unchanged at 37%, marking the fifth straight hold since the aggressive hiking cycle ended. The bank cited rising crude oil prices and geopolitical tensions as key risks that could delay disinflation, maintaining a "tight monetary policy" stance until sustainable price stability is achieved. The decision statement emphasized that future moves will be strictly "data-dependent," with a focus on the underlying trend of inflation and the evolution of the current account deficit.

Market Participants Raise Year-End Inflation Forecast to 29.61%

The CBRT’s September 2026 Market Participants Survey, released on September 11, revealed a deterioration in inflation expectations, with the year-end CPI forecast rising to 29.61% from previous lower estimates. Participants also increased their 12-month USD/TRY forecast to 58.60, while the year-end dollar expectation settled at 51.57, reflecting concerns over currency depreciation despite high real rates. The survey also lowered the 2026 GDP growth estimate to 3.0%, signaling a potential trade-off between tight policy and economic activity.

Net International Reserves Drop to $65.66 Billion

Data released on September 10 showed that the CBRT’s net international reserves fell to $65.66 billion in the week ending September 4, down from $66.62 billion the previous week. This decline continues a three-week trend where total reserves have dropped by approximately $4.6 billion from recent highs, raising questions about the central bank’s capacity for FX interventions if volatility spikes. Official gross reserves also decreased by 2.1% weekly to $184.2 billion, driven by higher FX liabilities and outflows.

Lira Deposit Rates Hit Lowest Level Since 2023

Average interest rates on Turkish Lira deposits with maturities of one to three months fell to 37.3% as of September 4, the lowest level since 2023. This decline suggests that banks are beginning to adjust deposit pricing downward in anticipation of a potential easing cycle later in 2026 or early 2027, even as the policy rate remains elevated. Analysts at ING note that normalizing liquidity conditions and a lower effective funding rate are pushing market pricing closer to their 2026 rate view.

Local view

Local financial media highlighted the "triple pressure" facing the CBRT: the Federal Reserve’s potential rate moves, rising oil prices, and lira exchange rate dynamics. Haberglobal noted that while high interest rates continue to attract foreign investors, global risks are mounting, which could complicate the disinflation path. TSKB Economic Research emphasized that the CBRT’s decision to keep rates steady reflects a cautious approach to weakening domestic demand and improving core inflation trends. Meanwhile, Cumhuriyet focused on the negative trend in reserves, warning that the $4.6 billion loss over three weeks is a significant signal for market stability.

Context & numbers

• Policy Rate: 37.00% (Unchanged since May 2026).
• Overnight Corridor: Lending rate at 40.0%; Borrowing rate at 35.5%.
• Net International Reserves: $65.66 billion (Week ending Sept 4).
• Gross Reserves: $184.2 billion (Down 2.1% WoW).
• Year-End Inflation Expectation: 29.61% (Up from previous survey).
• 12-Month USD/TRY Forecast: 58.60.
• Year-End USD/TRY Forecast: 51.57.
• Lira Deposit Rate (1-3 Months): 37.3%.

On the radar

• Next PPK Meeting: The Monetary Policy Committee is scheduled to meet on September 25, 2026, to discuss the Q3 Inflation Report and make the next interest rate decision.
• Inflation Data: Markets are awaiting the September CPI data from TurkStat, which will be critical for assessing whether the "data-dependent" easing path remains viable.
• Reserve Trends: Watch for further declines in net reserves; if they drop below $60 billion, intervention risks may increase.