Turkey’s central bank (CBRT) has resumed one-week repo auctions at its 37% policy rate after suspending them when the Iran conflict sent energy prices spiraling. Turkish banks, which were forced to rely on overnight lending facilities at 40%, can now access cheaper weekly funding. Headline inflation peaked at 32.1% in June 2026, but its moderation gives the CBRT confidence to reopen this liquidity channel. Forward guidance suggests rate cuts of 100 basis points in October and December 2026, bringing the policy rate to 35% by year-end. This roadmap remains conditional on energy price developments and the risk of inflationary resurgence in case of renewed conflict escalation.
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