The Central Bank of Turkey raised its benchmark one-week repo rate by 500bps to 35% at its October 2023 meeting, in line with expectations, and extending the central bank’s monetary policy normalization after a period of unorthodox, ultra-loose real interest rates. It was the TCMB’s fifth consecutive rate hike, taking nominal borrowing costs to their highest since 2003, in order to anchor inflation expectations and continue efforts toward disinflation in the Turkish economy. The bank noted that inflation in the third quarter was above policymakers’ expectations, largely due to growing wages and an increasingly weak lira. Still, the central bank also noted that preceding interest rate hikes in the current cycle have positively impacted FDI, restarted the building of forex reserves, and started the balancing of the country’s current account. Looking forward, the TCMB stated that it would continue to make future rate decisions based on signals from the latest data. source: Central Bank of the Republic of Turkey
Interest Rate in Turkey averaged 57.71 percent from 1990 until 2023, reaching an all time high of 500 percent in March of 1994 and a record low of 4.50 percent in May of 2013. This page provides the latest reported value for - Turkey Interest Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. Turkey Interest Rate - data, historical chart, forecasts and calendar of releases - was last updated on October of 2023.
Interest Rate in Turkey is expected to be 35.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the Turkey Interest Rate is projected to trend around 15.00 percent in 2024 and 12.00 percent in 2025, according to our econometric models.
Turkey Interest Rate
In Turkey, benchmark interest rates are set by the Central Bank of the Republic of Turkey Monetary Policy Committee (Türkiye Cumhuriyet Merkez Bankasi - TCMB). From June 1st 2018, the main interest rate is the one-week repo rate and the overnight borrowing and lending rates will be determined at 150 bps below/above the one-week repo rate. The central bank simplified its monetary policy framework on May 28th 2018 from a different system with four main key rates, with the late liquidity window lending rate being one of the most followed.
| Actual | Previous | Highest | Lowest | Dates | Unit | Frequency | ||
|---|---|---|---|---|---|---|---|---|
| 35.00 | 30.00 | 500.00 | 4.50 | 1990 - 2023 | percent | Daily |
News Stream
Turkey Raises Interest Rate to 35% as Expected
The Central Bank of Turkey raised its benchmark one-week repo rate by 500bps to 35% at its October 2023 meeting, in line with expectations, and extending the central bank’s monetary policy normalization after a period of unorthodox, ultra-loose real interest rates. It was the TCMB’s fifth consecutive rate hike, taking nominal borrowing costs to their highest since 2003, in order to anchor inflation expectations and continue efforts toward disinflation in the Turkish economy. The bank noted that inflation in the third quarter was above policymakers’ expectations, largely due to growing wages and an increasingly weak lira. Still, the central bank also noted that preceding interest rate hikes in the current cycle have positively impacted FDI, restarted the building of forex reserves, and started the balancing of the country’s current account. Looking forward, the TCMB stated that it would continue to make future rate decisions based on signals from the latest data.
2023-10-26
Turkey Hikes Policy Rate to 30%
The Central Bank of Turkey raised its benchmark one-week repo rate by 500 bps to 30 percent on September 21st, as expected, and pushing borrowing costs to the highest since September 2003. It was the central bank's fourth straight hike under the stewardship of Governor Hafize Gaye Erkan to rein in inflation running at almost 60%. Policymakers said the decision to increase rates aims to continue the monetary tightening process in order to establish disinflation as soon as possible, anchor inflation expectations and control the deterioration in pricing behavior. The central bank added that monetary tightening will be gradually strengthened when and to the extent necessary until a significant improvement in the inflation outlook is achieved. The policy rate will be determined to provide monetary and financial conditions that will reduce the main trend of inflation and reach the 5 percent target in the medium term.
2023-09-21
Turkey Hikes Policy Rate by 750 bps to 25%
The Central Bank of Turkey raised its benchmark one-week repo rate by 750 bps to 25 percent on August 24th, following a 250 bps hike in the previous meeting and pushing borrowing costs to the highest since January 2004. Markets were expecting a smaller increase to 20%. The Central Bank's decision to raise the interest rate was driven by the goal of establishing a disinflationary path as quickly as possible, anchoring inflation expectations, and controlling the deterioration in pricing behavior. Recent indicators indicated a continued rise in the underlying trend of inflation. Despite these challenges, the Committee still believes that disinflation will be achieved in 2024. The central bank reiterated its commitment to a continued monetary tightening process, reinforcing the stance to strengthen monetary policy as necessary in a gradual manner until there is a significant improvement in the inflation outlook.
2023-08-24
