FX.co ★ Turkey Lowers Key Repo Rate as Inflationary Pressures Show Signs of Easing

In a strategic move reflecting a cautious optimism regarding inflationary trends, Turkey has lowered its one-week repo rate to 38.00% in December 2025, down from the previous 39.50%. This adjustment, implemented as of December 11, marks an encouraging sign for the nation's economic outlook, following a high period of inflationary pressure.

The decision by the Turkish Central Bank to adjust the key rate suggests a response to tentative signs of easing inflation, drawing from macroeconomic indicators that point toward increased stability. Last altered in October 2025, the repo rate stood at a high of 39.50% as the country grappled with hyperinflation, placing pressure on borrowers and challenging sustained economic growth.

Analysts predict that the recent interest rate cut could spur increased economic activities by making borrowing slightly more affordable, thereby potentially boosting consumer spending and investment. However, they advise ongoing monitoring of inflationary trends to ensure that momentum continues toward a balanced economic environment. Overall, the repo rate reduction reflects a calculated effort by Turkish authorities to harmonize economic growth with inflation control.