Türkiye's central bank aims to lower interest rate to 21% at end-2025, governor says

The Central Bank of the Republic of Türkiye targets to lower its policy interest rate to 21% by the end of 2025, the governor said on Wednesday.

Speaking at the Istanbul Chamber of Industry (ISO), Fatih Karahan said projections related to the underlying trend of inflation improved, albeit slower than anticipated.

He clarified: “With the continuation of the disinflation process and the subsequent establishment of price stability, predictability will increase.

"Thus, investment, production, and consumption decisions will be made with a longer-term perspective.”

Karahan noted that the disinflation process is ongoing and recalled that consumer inflation fell to 48.6% in October, a significant drop from its peak in May.

The bank expects 44% growth by the end of the year, he noted.

He pointed out: “In addition to the low core goods inflation, services sector inflation, where signs of improvement have become more evident, also plays a role in this development.

"Inflation, which fell rapidly in the summer months due to the base effect, will continue to fall in the coming period with the improvement in monthly inflation."

Underlining that the bank will maintain its tight monetary policy stance in a way to ensure the continuation of disinflation, Karahan emphasized that the slowdown in the underlying trend of inflation continues and that the bank closely monitors the underlying trend of inflation.