Turkey Monetary Policy November 2022


Turkey: TCMB delivers last cut of easing cycle in November

November 24, 2022

The Central Bank of the Republic of Turkey (TCMB) fulfilled expectations at its 24 November meeting by delivering a 150 basis point rate cut, which brought the one-week repo rate down to 9.00% from 10.50%. The move brought the rate to President Erdogan’s year-end single-digit target, and the Bank said that it marked the last cut of the easing cycle.

In its press release, the Bank reiterated that inflation has chiefly been driven by soaring energy costs and supply shocks, both stemming from geopolitical developments. The TCMB expressed concerns over an economic slowdown in H2 and ultimately decided to prioritize growth over price stability; inflation has hit fresh series highs throughout H2. However, the Bank expects disinflation to start on the back of previous macroprudential measures and the resolution of the war in Ukraine.

The Bank stated that the current rate is appropriate and announced that with this move, the rate cut cycle will end. The TCMB also reiterated that it is committed to using all of its available tools until indicators point to a sustained fall in inflation and the medium-term 5.00% percent target is achieved.

The next meeting is scheduled for 22 December.

Commenting on the decision, Muhammet Mercan, chief Turkey economist at ING, said:

“There are expectations of some easing in the current banking sector regulations along with targeted credit stimulus measures in the pipeline such as Credit Guarantee Fund (CGF) loans. The ongoing expansionary stance on the fiscal side has also become more pronounced lately. We expect the CBT to keep its policy rate unchanged at 9% ahead of the elections.”

FocusEconomics panelists expect the one-week repo rate to end 2023 at 22.75% and 2024 and 25.00%.

Author:, Junior Economist

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Turkey Monetary Policy Chart

Turkey Monetary Policy November 2022 2

Note: One-week repo rate in %.
Source: Central Bank of the Republic of Turkey (CBRT).

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