Turkey's Central Bank Holds Policy Rate at 37% Amid Inflation and Energy Risks

The Türkiye Cumhuriyet Merkez Bankası (TCMB) kept its policy rate unchanged at 37% during the July 2026 Monetary Policy Committee meeting. The one‑week repo rate remained at 37%, while the overnight borrowing and lending rates were held at 40% and 35.5% respectively. The decision cited a modest decline in the June inflation trend but warned of a temporary rise in July due to higher energy prices and geopolitical uncertainty.

A household expectation survey released by the TCMB showed a slight shift in asset preferences: gold‑investment intent fell to 40.3% while interest in buying homes, shops or land rose to 38.5%. Inflation expectations for the next 12 months fell to 44.9% for households and 32.5% for the real sector. Following the announcement, the Turkish lira weakened, with the dollar reaching a new record of 47.34 per lira and the euro rising to 53.91.

Financial services confidence also improved, with the FHGE index climbing 2.1 points to 155, driven by better employment expectations and stronger demand outlook. Analysts described the rate hold as expected and noted the central bank’s cautious tone, emphasizing monitoring of energy costs and external risks.