CBRT delays easing due to geopolitical risks and oil prices above $90, maintaining a cautious stance with hawkish guidance.
Turkey’s central bank is set to keep its benchmark rate at 37.00% amid elevated oil prices above $90 and geopolitical tensions. The decision follows recent shifts in policy outlook, including tariff adjustments that limit flexibility to offset higher energy costs.
Markets had priced in a potential restart of one-week repo auctions at 37%, but funding is expected to remain at the upper end of the corridor. The CBRT is likely to emphasize a meeting-by-meeting approach, avoiding signals of an imminent rate-cutting cycle.
Rate cuts are still anticipated in Q4, with a target of 35.00%, while the Turkish Lira’s carry appeal persists due to reserve accumulation and high yields.