Turkey’s central bank cut its benchmark one-week repo rate to 38% from 39.5% on Thursday, marking its fourth consecutive rate cut following positive inflation data in November.
The Monetary Policy Committee, chaired by Governor Fatih Karahan, made the decision after consumer inflation came in lower than expected last month, primarily due to a surprise drop in food prices.
“In November, consumer inflation was lower than expected due to a downward surprise in food prices,” the committee stated. Despite the positive data, the committee cautioned that inflation expectations and pricing behavior still pose risks to the ongoing disinflation process.
Turkey’s annual inflation slowed to 31.1% in November, exceeding expectations, and is expected to remain around this level until the end of the year, according to Treasury and Finance Minister Mehmet Şimşek. This figure remains above the government’s 24% target for 2025, with the central bank previously attributing the overshoot to unexpectedly high food prices in recent months.
In October, the central bank cut its one-week repo rate by 100 basis points to 39.5%, while maintaining its position that the overall monetary policy stance remained tight.
