Turkey Central Bank Announces Interest Rate Decision: October 2025

Central Bank of the Republic of Turkey's October Interest Rate Decision

The Central Bank of the Republic of Turkey (CBRT) decreased the policy interest rate by 100 basis points to 39.5% at the Monetary Policy Committee (MPC) meeting in October, in line with market expectations. This reduction came after the previous month's decrease from 43% to 40.5%.

What Were Economists' Expectations?

The expectations for an interest rate cut from the CBRT were shaped based on the views of 22 economists participating in an AA Finance survey. These economists had predicted that the CBRT would lower the one-week repo auction interest rate by 100 basis points. The median expected rate for the year-end policy interest rate was set at 37.5%.

Data on Inflation and Consumer Spending

According to data from the Turkish Statistical Institute (TUIK), inflation increased by 3.23% month-on-month and by 33.29% year-on-year in September. Notable increases were recorded in food and non-alcoholic beverages at 36.06%, transportation at 25.30%, and housing at 51.36%. On a monthly basis, increases were realized in food and non-alcoholic beverages at 4.62%, transportation at 2.81%, and housing at 2.56%.

Exchange Rates and Future Expectations

According to the results of the October 2025 Market Participants Survey, participants' inflation expectations for the end of the current year rose from 29.86% to 31.77%. The 12-month ahead inflation expectation was recorded at 23.26%. In terms of exchange rates, the current year-end dollar/TL expectation declined to 43.56 TL, while this figure is expected to be 49.75 TL for 12 months later.

The information provided here does not constitute investment advice.