Policy Rate Cut Overview
The Central Bank of the Republic of Turkey (TCMB) announced on September 11, 2025, a reduction of the policy rate (1-week repo rate) by 250 basis points (bp, 1bp = 0.01%) to 40.50%. This decision implements further easing of Turkey high-level policy rates.
Rate Cut Trajectory and Background
Past Policy Rate Trends: Turkey policy rate has been gradually reduced since reaching 50% (the highest level since May 2010) in March 2024
- April 2025: 46%
- July 2025: 43%
- September 2025: 40.50% (current decision)
This series of rate cuts is positioned as part of policies to promote economic growth while maintaining inflation suppression effects.
Central Bank Policy Direction
TCMB emphasized in its statement the following policy decisions to stabilize exchange rates and strengthen the disinflation process:
- Maintain tight monetary stance until achieving price stability
- Review policy measures cautiously at each meeting based on inflation outlook
- Achieve financial and fiscal stability to reach the medium-term inflation target of 5%
Impact on Economic Policy
This rate cut demonstrates the flexibility of monetary policy in the Turkish economy and is positioned as part of efforts to balance inflation suppression with economic growth. Consideration for exchange rate stabilization also serves as an important element in policy decisions.