TCMB's Interest Rate Cut Expectations Are Rising: Predictions from Economists

Economists Reveal Their Expectations

Domestic markets are focused on the last interest rate decision of the year to be made by the Central Bank of the Republic of Turkey (CBRT) next week. Economists continue to share their predictions regarding how the CBRT will set the interest rate. In the survey conducted by Matriks News for the CBRT Monetary Policy Committee (MPC) meeting in December, 27 economists provided their opinions.

Expectations and Predictions for Interest Rate Cuts

The median expectation of economists for the last MPC meeting of the year is a reduction of the policy rate by 150 basis points, bringing it down from 39.5 percent to 38 percent. Among the economists participating in the survey, 9 people expect a cut of 100 basis points, 11 people expect a cut of 150 basis points, and 7 people expect a cut of 200 basis points. Following the decision that will be made in this year's last MPC meeting, the end-of-2025 interest rate forecast is also set at 38 percent.

2026 Interest Rate Predictions

The median expectation for the year 2026, shared by 23 economists, is formed at 28 percent. These predictions show a distribution among economic analysts in the 25 to 31 percent range. It has been announced that the Central Bank's interest rate decision will be revealed on December 11, Thursday at 2:00 PM.

QNB Turkey Evaluation

QNB Turkey Economist Deniz Çiçek linked the decrease in monthly inflation in November to the decline in unprocessed food prices and provided evaluations about the trends in inflation figures. Çiçek pointed out that no improvement has been observed in service inflation and emphasized that the main trend of inflation has been horizontally fluctuating around 2 percent for a long time.

Çiçek stated that the CBRT would determine its upcoming interest rate cuts with a cautious strategy based on the inflation outlook. The economist said, “Unless there is a clear decline in the inflation trend, we do not expect an increase in the amounts of interest rate cuts.” He anticipates a cut of 100 basis points in the MPC meeting in December, just like the previous meeting.