Regulatory Alerts2026-03-19
Added
Open Letter to the Government on 2025 Inflation Deviation and Monetary Policy Actions
The Central Bank of the Republic of Türkiye reports that 2025 inflation exceeded the designated uncertainty band around the target, citing supply-side shocks, price rigidity, and misaligned expectations as primary causes. The letter details monetary policy adjustments, including a total reduction of the policy rate by 1,300 basis points from a peak of 46 percent to 37 percent by January 2026, alongside temporary suspensions of one-week repo auctions and the implementation of macroprudential measures to terminate FX-protected deposit accounts. The document asserts that the budget deficit-to-GDP ratio stood at 2.9 percent in 2025 and states that the monetary policy stance will be tightened if the inflation outlook significantly deteriorates.