Analysts at the Central Bank of the Republic of Turkey (CBRT) have updated their projections for the country’s average interest rate for the current year. The latest outlook suggests that by year-end the rate is expected to hover between 7% and 9% on an annual basis, reflecting a cautious stance as policymakers balance inflation pressures with growth needs. This revision comes as part of a broader effort to align monetary policy with evolving domestic and external conditions while communicating clearly to markets and households about the path ahead.
In the updated forecast, the central bank’s core rate ranges for the present year and the following year have been adjusted higher by about half a percentage point. The projection now places the average key rate at 7.0% to 9.0% for 2023 and 6.5% to 7.5% for 2024. Such adjustments are commonly driven by the bank’s assessment of inflation momentum, expectations about currency stability, and the need to preserve policy credibility in the face of global price movements. These considerations were outlined during a press briefing that followed a meeting of the bank’s leadership.
The rationale offered for maintaining a higher medium-term rate center on achieving an inflation target around 4%. Policymakers view the rate as a tool to anchor price expectations and to create room for spacious macroeconomic adjustment without compromising financial stability. Yet, the central bank governor did acknowledge the possibility of easing measures before December if incoming data show sustained progress toward the objective, noting that the urgency for such a move has diminished as inflation trajectories stabilize.
During the leadership meeting held on February 10, the decision was to keep the key rate unchanged at the prevailing level. This stance maintains the annual benchmark near 7.5% as it has stood since mid-September of the previous year, marking a period without a rate change that lasted several months. In that interval, there were no successive alterations to the policy rate, signaling a wait-and-see posture as actors assess how domestic demand, supply-side factors, and international developments interact with inflation dynamics.