JPMorgan lowers Turkey policy rate outlook to 35% amid falling oil prices

JPMorgan has revised its forecast for Turkey’s 2026 year‑end policy rate, cutting it to 35% from a previous 37% outlook. The bank attributes the downgrade to a sharp decline in oil prices following the US‑Iran cease‑fire and to recent monetary‑easing signals from the Central Bank of the Republic of Turkey (CBRT). JPMorgan expects the CBRT to lower the policy rate by 100 basis points at its Monetary Policy Committee meetings on 10 September and 22 October, bringing the rate to 35% by year‑end.

The analysts also anticipate that the CBRT will restart weekly repo auctions next month, which could reduce the effective funding rate from around 40% to 37%. The central bank has kept the policy rate unchanged in its last three meetings after a 100‑basis‑point cut to 37% in January, and has been funding the market at approximately 40% since the regional conflict escalated. JPMorgan’s revision reflects its view that lower energy prices and the CBRT’s verbal guidance signal a more accommodative monetary stance in Turkey.