Turkey Rates and the CBRT: Lira, Reserves, Inflation — 2026-09-14
The Central Bank of the Republic of Türkiye (CBRT) held its policy rate steady at 37% for a fifth consecutive meeting, citing rising oil prices and geopolitical tensions as risks to disinflation. Meanwhile, market participants raised their year-end inflation expectations to 29.61%, and net international reserves dipped slightly to $65.66 billion, signaling a cautious stance despite improving underlying price pressures.
Turkey Rates and the CBRT: Lira, Reserves, Inflation — 2026-09-14
Top developments
CBRT Maintains 37% Policy Rate Amid Energy Shocks
On September 10, 2026, the CBRT’s Monetary Policy Committee (PPK) left the one-week repo policy rate unchanged at 37.00%. This marks the fifth consecutive hold, with policymakers explicitly citing the surge in Brent crude prices and regional geopolitical tensions as key factors threatening to slow the decline in inflation. The decision underscores the central bank's priority of anchoring inflation expectations over immediate easing, even as core inflation trends show improvement.
Market Expectations Shift: Inflation Outlook Edges Higher
The CBRT’s latest Market Participants Survey (Piyasa Katılımcıları Anketi), released on September 11, 2026, revealed a slight uptick in inflation expectations. The year-end CPI forecast rose to 29.61%, while the 12-month-ahead USD/TRY exchange rate expectation climbed to 58.60. Despite the higher inflation outlook, market consensus maintains that the policy rate will remain at 37% through the end of the year, reflecting skepticism about near-term cuts given global energy volatility.
Net Reserves Decline to $65.66 Billion
Weekly data from the CBRT for the week ending September 4, 2026, showed a decline in net international reserves to $65.66 billion, down from $66.62 billion the previous week. Official reserve assets also fell by 2.1% to $184.2 billion, while net reserves excluding swaps dropped to $53.4 billion. This modest drain suggests continued intervention or outflows, though the overall buffer remains substantial compared to earlier crisis periods.
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, 2026. This is the lowest level recorded since 2023, indicating that banks are beginning to pass on the stability of the policy rate into deposit pricing, potentially reducing the cost of credit for consumers and businesses. Commerzbank analysts note that effective monetary conditions now depend more on liquidity tools than just the headline policy rate.
Local view
Local financial media highlights the "triple pressure" on the CBRT: the Federal Reserve's potential rate moves, high oil prices, and the lira's exchange rate. HaberGlobal notes that while high rates keep foreign investor interest in lira assets alive, global risks are mounting. Sabah columnist Nurullah Gür argues that the CBRT is actively preparing the ground for future rate cuts by normalizing liquidity conditions and shifting back to weekly repo tenders, which has lowered the effective funding cost by approximately 3 percentage points. TSKB’s weekly report emphasizes that the decision to hold rates reflects a focus on weakening domestic demand and the underlying trend of disinflation, rather than headline volatility.
Context & numbers
- Policy Rate: 37.00% (Held steady for 5th meeting)
- Net International Reserves: $65.66 billion (Week ending Sept 4)
- Official Reserve Assets: $184.2 billion (-2.1% w/w)
- Year-End Inflation Expectation: 29.61% (Up from previous survey)
- 12-Month USD/TRY Forecast: 58.60
- Lira Deposit Rate (1-3M): 37.3% (Lowest since 2023)
On the radar
- Next PPK Meeting: The next Monetary Policy Committee meeting is scheduled for late September or early October, with markets watching for any shift in language regarding oil-driven inflation risks.
- Liquidity Tools: Analysts are closely monitoring the CBRT's use of weekly repo tenders versus other liquidity instruments, as this effectively determines the real funding cost for banks despite the static policy rate.
- Global Bond Yields: Rising global yields, particularly in Treasuries and Bunds, due to oil shocks and debt issuance, continue to pressure emerging markets, including Turkey.
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