ING’s Muhammet Mercan has highlighted recent actions by the Central Bank of the Republic of Türkiye (CBRT), noting that the bank has normalized liquidity through weekly repo auctions, which reduced the effective cost of funding and TLREF to the policy rate of 37%, down from 40% previously [1]. ING expects the CBRT to keep rates unchanged at its September meeting, following this liquidity adjustment [1].
Looking ahead, ING projects two 100 basis point rate cuts in the fourth quarter, which would bring the policy rate down to 35% [1]. This forecast is based on weaker-than-expected second quarter GDP data and a gradual cooling of inflation [1]. However, ING cautions that any further escalation in the Gulf conflict could pose upside risks to inflation, potentially impacting the rate outlook [1].
ING further anticipates that the policy rate will remain at 35% by the end of 2026, suggesting a period of relative stability after the expected cuts [1]. No immediate market reactions or analyst opinions beyond ING’s forecast are mentioned in the article [1].
CONCLUSION
ING expects the CBRT to hold rates in September and deliver two rate cuts in the fourth quarter, citing weaker GDP and cooling inflation. Liquidity normalization has already reduced funding costs to the policy rate. Upside inflation risks remain if Gulf tensions escalate, but ING sees the policy rate at 35% through 2026.