How Turkey's Central Bank Sets Interest Rates: 2026 Decisions and the 10 December Meeting

Turkey's central bank, the Central Bank of the Republic of Türkiye (TCMB), sets its main interest rate at eight scheduled meetings of its Monetary Policy Committee (Para Politikası Kurulu, PPK) a year and publishes each decision at 14:00 Turkish time on the meeting day. In 2026 the committee cut the policy rate, the one-week repo auction rate, from 38% to 37% on 22 January, kept it at 37% at five meetings in a row, and cut it again to 36% on 22 October, the first cut in nine months. The last decision of 2026 is due on 10 December. Governor Fatih Karahan chairs the committee, and the bank says its medium-term inflation target is 5%.

What is the PPK and how does it decide?

According to the TCMB, the Monetary Policy Committee is made up of the governor, the deputy governors, one member chosen from the bank's board, and one further member appointed with the President's approval on the governor's recommendation. A Treasury representative may attend without a vote. The committee needs two-thirds of its members present, decides by majority, and the governor breaks a tie. Before each vote, the bank's departments brief members on inflation, the balance of payments, economic activity, public finance and global developments. Six members took part in the 22 October meeting: Yaşar Fatih Karahan (governor), Hatice Karahan, Fatma Özkul, Gazi İshak Kara, Yusuf Emre Akgündüz and Elif Haykır Hobikoğlu.

The policy rate is the rate at which the TCMB lends to banks for one week at its repo auctions. Around it sits a corridor: the overnight lending rate (the ceiling at which banks can borrow overnight) and the overnight borrowing rate (the floor the bank pays on banks' overnight deposits). After 22 October the corridor runs from 34.5% to 39% around the 36% policy rate, a width of 4.5 percentage points. The decision and a short rationale are posted on tcmb.gov.tr at 14:00 on the meeting day. A longer summary of the committee's assessment follows within five working days, and four times a year the governor presents a quarterly Inflation Report with the bank's forecasts.

What did the central bank decide at each 2026 meeting?

TCMB rate decisions in 2026, from the bank's own press releases (one-week repo rate; overnight lending / borrowing rate): 22 January: cut from 38% to 37%; corridor lowered to 40% / 35.5%. 12 March: held at 37%; 40% / 35.5%. 22 April: held at 37%; 40% / 35.5%. 11 June: held at 37%; 40% / 35.5%. 23 July: held at 37%; 40% / 35.5%. 10 September: held at 37%; 40% / 35.5%. 22 October: cut from 37% to 36%; corridor lowered to 39% / 34.5%. 10 December: last meeting of 2026, pending. The pause came during the war involving Iran and rising energy prices. On 1 March the bank suspended its one-week repo auctions, citing developments in financial markets, and it did not resume them until 23 August. Throughout the holds, its statements said policy would be tightened if the inflation outlook deteriorated significantly and persistently.

What happened at the 22 October 2026 meeting?

On 22 October the committee cut the policy rate by 100 basis points to 36% and lowered both edges of the corridor by one point. In its statement, the bank said recent data confirmed a slowdown in the underlying trend of inflation and that domestic demand remained weak, but it called high energy prices an upside risk. It also changed one line of its guidance: the size and timing of policy steps will now be decided meeting by meeting. Before the meeting, most economists surveyed by the press expected exactly this 100-point cut, while Goldman Sachs had predicted a hold. The TCMB's October survey of 71 market participants had also put the expected rate at 36%. After the 14:00 announcement, Yeniçağ reported the BIST 100 at 11,501.22 points, the dollar up 0.14% at 49.63 lira and gram gold down 1.52%. The BIST 100 ended the week 5.16% lower at 11,116.99.

How does a rate cut reach deposits, loans and the lira?

The TCMB says a tight policy stance works through three channels: demand, the exchange rate and expectations. A policy cut does not pass automatically or one-for-one to bank customers. Bianet noted after the October decision that deposit and loan rates also depend on banks' funding costs, liquidity, risk and maturities. The bank also caps loan growth directly. In May it lowered eight-week growth limits for consumer, vehicle and business loans, and on 1 October it raised the limit for SME loans from 4.5% to 5%. The bank's summary of the September meeting gives a sense of how far bank rates sit above the policy rate. In the week to 4 September, average lira deposit rates were 44.4%, commercial loans 49.3%, general-purpose consumer loans 63.0% and housing loans 41.9%. For savers, Barclays wrote after the October cut that a further cut in December would leave the monthly dollar return on lira deposits at about 0.63%.

What is expected at the 10 December meeting?

Economists quoted by BloombergHT after the October decision mostly expect another 100-point step. ING's chief economist Muhammet Mercan and HSBC's Melis Metiner both forecast a cut to 35% in December. Citi also sees 35% at the end of 2026, while Barclays expects 35% at year-end and 30% at the end of 2027. In the TCMB's October survey, participants put the rate at 35% after the second upcoming meeting and at 29.01% in twelve months. They expected 29.63% annual inflation at the end of 2026, against the bank's own forecast of 28%, raised from 26% in August. Expectations outside markets are higher: the TCMB's October survey put households' 12-month expectation at 43.75% and firms' at 31.80%. The bank has said it would tighten again if the outlook worsened significantly. How official and independent inflation figures compare is covered in Cupure's separate explainer on TÜİK and ENAG inflation in 2026.

Key dates in the TCMB's published calendar: 30 October 2026: summary of the 22 October meeting. 12 November 2026: Inflation Report 2026-IV, with updated forecasts. 27 November 2026: Financial Stability Report. 10 December 2026, 14:00: last rate decision of 2026. 17 December 2026: summary of the December meeting. 21 January 2027: first decision of 2027, followed by 18 March, 22 April and 10 June. The bank has so far published only the first half of its 2027 calendar. This page will be updated after each decision.