TCMB announced its interest rate decision for October: Latest developments.

Central Bank of the Republic of Turkey Announced Its October Interest Rate Decision

The Central Bank of the Republic of Turkey (CBRT) made a notable decision during the October Monetary Policy Committee meeting by reducing the policy interest rate by 100 basis points to 39.5%. This decision followed a rate of 43% in September and was a development anticipated by the markets.

Interest Rate Reduction Goals and Inflation Expectations

In the decision statement, the CBRT emphasized that the main trend of inflation increased in September, but demand conditions were at a disinflationary level. However, recent data indicates that the pace of the disinflation process has slowed down. The Committee stated that it would maintain a tight monetary policy stance until price stability is achieved. It was expressed that various steps would be taken considering inflation expectations and the main trends.

Economist Expectations and Inflation Data

Economists had anticipated a 100 basis point cut from the CBRT. According to a survey conducted by AA Finance involving 22 economists, the median estimate for the year-end policy rate was 37.5%. According to data from the Turkish Statistical Institute (TUIK), inflation rose by 3.23% on a monthly basis and recorded an annual rate of 33.29% in September. This situation led to significant increases in essential expenditure items such as food and non-alcoholic beverages.

Exchange Rate and Future Expectations

According to the results of the October 2025 Market Participants Survey, participants' year-end inflation expectations rose from 29.86% to 31.77%. Additionally, exchange rate expectations have also changed; the year-end dollar/TL expectation decreased from 43.85 TL to 43.56 TL. The 12-month forward exchange rate expectation rose from 48.96 TL to 49.75 TL.

These developments play a significant role in the strategy and decision-making processes for investors. Investors will continue to closely monitor the steps that the CBRT will take.