Capital Economics forecasts 850 basis points of rate cuts
UK-based economic research firm Capital Economics expects the Central Bank of the Republic of Türkiye (CBRT) to cut its policy interest rate by a further 850 basis points to 27.50% by the end of 2027.
According to its assessment published on October 26, 2026, the firm forecasts an additional 100-basis-point cut in December, bringing the policy rate down to 35%. Capital Economics also projects that inflation will decline to approximately 20% by the end of 2027, suggesting that monetary easing could continue throughout next year.
The firm stated that the CBRT's decision to lower its policy rate to 36% in October was in line with its expectations, highlighting the decline in annual inflation to 29.7% in September. Capital Economics believes that easing inflation could create room for further monetary policy loosening and expects real interest rates to remain positive despite additional cuts. However, it warned that the central bank could pause its easing cycle if inflation accelerates again or renewed pressure emerges on the Turkish lira.
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