Interest rate forecast from economists: A warning to citizens

In a survey involving 26 brokerage firms and banks from the financial world, economists are almost certain that the Central Bank of the Republic of Türkiye (TCMB) will keep the policy rate unchanged at 37.00 percent at the Monetary Policy Committee meeting to be held on September 10. While 20 of the experts participating in the survey stated that the interest rate would remain the same, only 2 economists predicted that the policy rate would be cut by 100 basis points to 36.00 percent.

In light of this data, the median estimate was 37.00 percent, while the average expectation was 36.90 percent. The upper limit among the forecasts was set at 37.00 percent, and the lower limit at 36.00 percent. Furthermore, it was stated that the borrowing and lending interest rates would also remain at their current levels, namely in the 35.50 percent and 40.00 percent bands, respectively.

INTEREST RATE EXPECTATIONS FOR THE REMAINDER OF THE YEAR

Economists agree that there will be an interest rate cut in the last quarter of the year. In a question answered by 12 of the survey participants, 10 economists expected an interest rate cut in the remaining two meetings of the year for the TCMB, while two people predicted a cut in one meeting. There were no participants who argued that there would be no cuts at all.

While the forecast that the benchmark interest rate would be 35.00 percent at the end of 2026 was maintained, the range of this estimate was expressed in a narrower band – between 34.00 percent and 37.00 percent. For the end of 2027, the interest rate expectation remained at 27.00 percent, while the forecast range for next year widened to between 20.00 percent and 31.00 percent. The median estimate for 12 months ahead was recorded at 30.00 percent.

TCMB'S RECENT DECISIONS AND MEETING CALENDAR

The Central Bank, which has kept the interest rate at 37.00 percent in its last four meetings, had lowered the rate from 38.00 percent to 37.00 percent in January with a move that fell short of market expectations. The weekly repo rate, which was 45.00 percent at the beginning of 2025, was reduced to 38.00 percent throughout last year with a total of 1,050 basis points in cuts.

The meeting dates ahead for the TCMB include October 22 and December 10, 2026. The Monetary Policy Committee meetings in the first half of 2027 will be held on January 21, March 18, April 22, and June 10. The final inflation report of the year will be presented to the public on November 12, 2026.

LIMITED RISE IN INFLATION EXPECTATIONS

Economists' year-end forecast for the Consumer Price Index (CPI) rose to 29.50 percent, while the previous forecast was at 29.00 percent. The highest inflation forecast for the year-end was reported as 30.40 percent, and the lowest as 28.00 percent.

Inflation expectations for the end of 2027 also rose to 23.00 percent, while the forecast range widens from 15.00 percent to 25.00 percent. While it is assessed that the slowdown in domestic demand and, in particular, the improvement in services inflation support the disinflation process, it was emphasized that geopolitical developments and fluctuations in energy prices still pose upward risks in terms of inflation.

News Source: 12punto