The Central Bank of the Republic of Türkiye cut its one-week repo auction policy rate from 37% to 36% at its October Monetary Policy Committee meeting. The overnight lending rate was lowered from 40% to 39%, and the overnight borrowing rate was reduced from 35.5% to 34.5%.
A cut as expected
The move matched expectations.
At its previous meeting in September, the committee had held the policy rate at 37%, leaving the overnight lending rate at 40% and the overnight borrowing rate at 35.5%. The October decision marks a step down from that level.
Inflation outlook and risks
In its decision text, the Monetary Policy Committee said that despite monthly fluctuations, recent inflation outcomes and leading indicators confirm the decline in the underlying trend. It said data on economic activity and the limited pass-through of supply shocks to domestic prices show that the weak course of domestic demand continues.
The committee flagged energy prices as a risk, noting they remain high due to persistent geopolitical tensions and continue to pose upside risks to the inflation outlook. It said the tight monetary policy stance will be maintained until price stability is achieved.
Meeting-based approach
The committee said it will act with a meeting-based, cautious approach. It added that it will tighten policy if there is a clear and lasting deterioration in the inflation outlook.
The medium-term inflation target remains 5%.
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