CBRT signals continued tight monetary policy

Karahan stated that geopolitical developments and rising energy prices have limited the decline in inflation. Emphasizing that energy prices remain above both the levels recorded during the previous reporting period and those seen before the war, Karahan announced that the central bank would maintain its tight monetary policy stance to support the disinflation process.

Assessing economic activity, Karahan noted that industrial production declined in the third quarter, while services output increased. He highlighted the continued slowdown in retail sales excluding gold and said demand conditions were expected to support the decline in inflation. Karahan also stated that the foreign trade deficit widened in October due to higher energy prices, adding that the CBRT maintained its outlook for weak external demand in 2026 followed by stronger demand in 2027. In its previous report, the CBRT had projected year-end inflation of 28% for 2026.