Central Bank of Turkey Holds Policy Rate at 37% Citing Weak Domestic Demand

21:31 - 11.06.2026

June 11, Fineko/abc.az. The Central Bank of the Republic of Turkey (TCMB) has kept its benchmark interest rate unchanged, pointing to a cooling domestic market and structural economic deceleration amidst ongoing Middle East geopolitical conflicts.

According to ABC.AZ, referencing Bloomberg HT surveys, the monetary committee held its key one-week repo rate steady at 37%, matching institutional consensus.

Interest Rate Corridor Breakdown:

  • Overnight Borrowing Rate: Maintained at 35.5%.

  • Overnight Lending Rate: Maintained at 40.0%.

Core Monetary Takeaways:

  • Macro Activity Slowdown: First-quarter metrics and leading indicators confirm that internal consumer demand continues to soften while overall macroeconomic momentum flags.

  • Inflation Realities: Following an April energy-driven spike, underlying inflation parameters eased marginally in May. However, structural risks tied to global oil and gas volatility remain severe due to war escalation.

  • Tight Stance Upheld: The TCMB reaffirmed its commitment to a restrictive policy framework until price stability is structural. The bank warned it would aggressively tighten credit conditions and deploy macroprudential liquidity tools if inflation baselines worsen permanently.