Turkish Central Bank Keeps Policy Rate at 37% as Loan Costs Remain High

The Central Bank of the Republic of Turkey (TCMB) left its policy rate unchanged at 37% during the June Monetary Policy Committee meeting. Banking institutions expect the rate to stay steady in July, with any cuts pushed to September or later. Meanwhile, deposit and consumer‑credit rates continued to climb: three‑month TL deposits reached an annualised 49.3%, average consumer‑loan rates rose to about 64%, and the overall average credit rate stood at roughly 62.5%.

Economist Prof. Dr. Şenol Babuşcu warned that a meaningful decline in loan rates this year is unlikely, noting that “the annualised equivalent of the 37% rate is 49%. Banks add 7 points for their costs and 5 points for profit margins, so rates end up a few points above 60%.” He said reducing rates would require inflation to fall below 15% and credit rates under 20%, thresholds he described as “very hard to achieve.”

The central bank cited persistent geopolitical developments in the Middle East and energy‑price volatility as continuing risks to the inflation outlook and monetary‑policy stance.