Central Bank of Türkiye Cuts Interest Rate to 36%

The Central Bank of the Republic of Türkiye reduced its key one-week repo auction rate by 100 basis points to 36% on October 22, 2026. This represents the first rate reduction since January. Alongside the benchmark rate, the bank lowered the overnight lending rate to 39% and the overnight borrowing rate to 34.5%.

The decision follows September data showing annual consumer inflation eased to 29.73%, the lowest level in nearly five years. Governor Fatih Karahan and the Monetary Policy Committee attributed the cut to weak domestic demand, though they noted that elevated energy prices and geopolitical tensions remain upside risks to inflation.

The bank intends to maintain a tight monetary policy stance to reach a medium-term inflation target of 5%. Economists expect a further 100 basis point cut during the final meeting of the year on December 10, which would lower the policy rate to 35%.