The Central Bank’s Monetary Policy Committee (MPC) will convene later this week for its final rate-setting meeting of 2025, with markets closely watching whether the recent decline in inflation will pave the way for another cut.
Analysts argue that November’s inflation figures, which came in lower than expected, have strengthened the bank’s hand in easing policy.
In October, the MPC reduced the one-week repo auction rate from 40.5 percent to 39.5 percent.
Initially, expectations for the December meeting centered on a 100–150 basis point cut, but following November’s inflation data, most analysts now anticipate a reduction of 150 basis points.
Türkiye’s annual inflation rate fell to 31.07 percent in November, its lowest level in four years. On a monthly basis, consumer inflation dropped to 0.87 percent, marking a 30-month low.
Central Bank Governor Fatih Karahan reiterated last week that the bank’s tight monetary stance will remain in place until price stability is achieved.
Karahan added that both short-term indicators and the medium-term outlook confirm that disinflation is ongoing, and that policy will be tightened if inflation deviates significantly from interim targets. “The step size will be reviewed prudently on a meeting-by-meeting basis, with a focus on the inflation outlook,” he said.
The OECD, in its interim Economic Outlook, projected that the Central Bank’s policy rate will decline from 40.5 percent in the third quarter of 2025 to 25 percent by the end of 2026 and 17 percent by the end of 2027, amid falling inflation. “Nevertheless, the real interest rate will remain positive and high, keeping monetary policy restrictive,” the report noted.
The next MPC meetings are scheduled for January 22 and March 12, 2026.
