Turkey Central Bank Keeps Interest Rate Unchanged at 37 Percent in June 2026 Meeting
Monetary Policy Decision for June 2026
The Central Bank of the Republic of Turkey announced its monetary policy decision for June 2026, keeping the policy interest rate unchanged at 37 percent. The decision was in line with market expectations. In addition to the main policy rate, the central bank also kept the overnight lending rate at 40 percent and the overnight borrowing rate at 35.5 percent unchanged.
Inflation Outlook and Economic Signals
According to the Monetary Policy Committee statement, inflation trends showed a slight easing in May following a previous increase that was partly driven by rising energy prices. However, the bank noted that global geopolitical developments continue to create volatility in energy markets, keeping cost pressures elevated.
Economic Activity and Domestic Demand
The central bank stated that economic activity continues to slow gradually, particularly in the first quarter of the year. Indicators suggest a continued weakening in domestic demand, while external uncertainties and cost pressures remain closely monitored due to their impact on the inflation outlook.
Monetary Policy Stance and Future Guidance
The statement emphasized that monetary policy will remain tight until price stability is achieved. Future interest rate decisions will depend on inflation outcomes, underlying trends, and expectations, and will be aligned with disinflation objectives. The bank also highlighted that decisions will continue to follow a data-driven, cautious, and meeting-by-meeting approach.
Risks and Policy Outlook
Authorities noted that if there is a significant and persistent deterioration in the inflation outlook, further tightening may be considered. Risks to inflation were described as tilted to the upside, reinforcing the need for a prudent monetary policy stance.
Liquidity Conditions and Financial Stability
Liquidity conditions and credit transmission mechanisms will continue to be closely monitored. The central bank stated that macroprudential measures will be used if necessary to support the transmission of monetary policy.
Inflation Target and Transparency Commitment
The central bank reaffirmed its commitment to the long-term inflation target of 5 percent. It also emphasized that all policy decisions will continue to be transparent, predictable, and focused on maintaining medium-term price stability.
Policy Meeting Summary
The Central Bank announced that the full summary of the Monetary Policy Committee meeting will be published within five business days.
