Turkish economists anticipate a continued tightening path for the country’s monetary policy, signaling a persistent stance aimed at curbing inflation and stabilizing the lira. Analysts surveyed by a major Turkish news outlet expect the Central Bank to lift the discount rate by five percentage points in the near term, bringing it to around 35 percent. The consensus among economists monitoring inflation dynamics points toward a higher peak within a 32.5 to 35 percent range, with some forecasters wagering on a possible move up to 40 percent by year’s end. The Central Bank Monetary Policy Committee is slated to convene on October 26, with Governor Hafize Gaye Erkan anticipated to announce the decision at 14.00 local time. This anticipated adjustment follows a sequence of gradual tightening implemented earlier in the year, signaling a cautious but determined effort to re-anchor inflation expectations and stabilize market expectations.
In June, the Central Bank of Türkiye signaled a shift toward a more cautious yet persistent tightening approach. The bank raised the refinancing rate from 8.5 percent to 15 percent, a move that surprised some market observers given expectations of a more modest adjustment. Then, at the September policy meeting, policymakers continued the gradual tightening path, lifting the rate from 25 percent to 30 percent. These steps were part of a broader strategy to address mounting inflation pressures while guiding the economy through a period of elevated price growth. The aim has been to restore price stability and support macroeconomic resilience amid fluctuating global conditions.
Inflation in Turkey remained elevated, prompting authorities to implement additional measures intended to restore price stability. Market observers expect continued tightening to curb inflation, which has been tracking in the high 60s to 70 percent range in recent months. Analysts describe a need for a cautious, phased approach, with expectations that the policy rate may gradually advance toward the mid-30s as the central bank seeks to re-anchor inflation expectations and support currency stability. This trajectory is watched closely by borrowers, investors, and exporters who rely on predictable monetary conditions to plan capital allocation and pricing strategies.
Historically, the Central Bank of Türkiye has pursued aggressive rate actions during periods of rising inflation, a pattern that began in 2021 when the central bank increased the key rate to combat price pressures. Market participants are watching closely how the current policy path aligns with inflation data, currency dynamics, and external economic conditions as the bank navigates the balance between growth momentum and price discipline. The ongoing policy stance reflects a commitment to gradual tightening rather than rapid moves, with communication and timing aimed at minimizing shocks while anchoring inflation expectations over the medium term.
In summary, the prevailing view among economists, as reported by major Turkish media outlets and corroborated by market observers, is that Türkiye will continue a measured tightening trajectory through late 2024 and into the following year. The outcome of the October 26 rate decision will be pivotal in signaling the near-term policy path, with borrowers and investors awaiting guidance on how quickly rates will move toward the 35 percent target and what that means for borrowing costs and overall economic activity. The scenario suggests a careful calibration of policy tools to balance growth momentum with inflation containment, aiming for sustained macroeconomic stability.
Attribution: the content reflects a synthesis of expert opinions and official statements reported by credible Turkish media and market analyses. (source: TRT News, Bloomberg, and other market observers)