Turkey's Central Bank Holds Rates Steady After Energy Price Shock

LootboxPhobia · 2026-03-12T19:58:19+00:00

The Central Bank of Turkey held interest rates unchanged, indicating that recent monetary tightening measures have been sufficient to address energy price shocks. By suspending 37% of repo auctions, bank borrowing costs have risen to 40%. If energy prices remain elevated, further policy tightening may be necessary.

LootboxPhobia

2026-03-12 19:58:19

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Investing.com – The Central Bank of Turkey kept interest rates unchanged on Thursday, indicating that recent adjustments to its lending operations have provided enough tightening to counter energy price shocks.

The Central Bank of the Republic of Turkey (CBRT) maintained its policy stance after implementing a monetary tightening equivalent to 300 basis points through the interest rate corridor. The central bank responded to soaring energy prices by suspending a one-week repo auction at a 37% interest rate.

Commercial banks are now required to borrow from the Central Bank of Turkey at a 40% interest rate through overnight lending facilities. This shift has increased the average cost of liquidity supply for banks.

The central bank’s decision suggests that policymakers believe current tightening measures are sufficient to address energy price shocks. However, if energy prices remain high for an extended period, it could force the CBRT to further tighten monetary conditions.

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