Foreign banks forecast CBRT rate cut to 35%
The Central Bank of the Republic of Türkiye's (CBRT) decision to lower its policy rate by 100 basis points to 36%, marking its first rate cut in nine months, has prompted assessments from international banks.
ING, HSBC, Citi, and Barclays expect monetary easing to continue, according to their latest reports. All four banks forecast an additional 100-basis-point cut in December, bringing the policy rate to 35% by the end of 2026. The institutions noted that slowing inflation and weakening domestic demand provide room for further easing, although elevated energy prices and geopolitical risks require a cautious monetary policy approach.
Forecasts for next year reveal differences among the banks. HSBC expects the policy rate to decline to 21% by the end of 2027, while Barclays projects 30% for the same period. HSBC also maintained its year-end inflation forecasts at 30% for 2026 and 15% for 2027. Citi highlighted inflation risks stemming from Turkish lira depreciation and high oil prices, while Barclays emphasized that a stronger disinflation process would be necessary for the pace of interest rate cuts to accelerate.
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