FX.co ★ Turkey Holds Policy Rate at 46% as Expected

The Central Bank of Turkey maintained its benchmark interest rate at 46% during its June 2025 meeting, following the unexpected 350 basis points increase in the previous decision, in line with market expectations. Monetary policymakers observed that inflationary pressures have subsided since April, although the risks to Turkey's economic growth have become more pronounced. These risks are primarily attributed to heightened global macroeconomic uncertainty due to protectionist trade policies and geopolitical tensions. The central bank emphasized that the current interest rate levels are sufficiently high to alleviate pressure on the capital accounts, which might otherwise lead to a depreciation of the lira. Maintaining exchange rate stability remains a priority for the central bank. This strategy followed the aggressive interest rate hike in April, which came in response to political conflicts between President Erdogan and the Mayor of Istanbul that led to a sharp decline in the domestic currency.