Türkiye’s central bank kept its benchmark one-week repo rate unchanged at 37% on Thursday, maintaining a cautious policy stance as high energy prices continue to threaten the country’s inflation outlook.

The decision leaves the overnight lending rate at 40% and the overnight borrowing rate at 35.5%. The bank last reduced its main policy rate in January, and officials are now emphasizing the need to preserve tight financial conditions while price pressures remain elevated.

Annual inflation declined in August, but the pace of improvement was slower than policymakers and markets had hoped. The central bank said the underlying trend was easing while warning that volatile energy costs could interrupt the disinflation process.

Türkiye is especially exposed to changes in international oil and natural-gas prices because it imports most of the energy it consumes. A prolonged rise in global prices can increase transport and production costs, widen the import bill and eventually reach household budgets.

The bank raised its 2026 inflation forecast to 28% in August, up from 26%, while keeping an interim target of 24%. Weak domestic demand has so far limited the extent to which higher energy costs have passed through to consumer prices.

Economists will now watch incoming inflation, demand and exchange-rate data for clues about the final meetings of the year. ING analysts cited by The Wall Street Journal expect two one-percentage-point cuts in the last quarter, which would take the policy rate to 35%, although that outlook remains sensitive to energy markets.

For businesses and households, Thursday’s hold means borrowing costs remain high as the authorities prioritize restoring price stability. The next policy steps are likely to depend on whether inflation continues to fall without a renewed shock from imported commodities.

Sources: The Wall Street Journal; Central Bank of the Republic of Türkiye policy guidance as reported on 10 September 2026.

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