Central Bank of Türkiye Announces Year-End Interest Rate Cut

Policy Rate Reduced to 38 Percent

On December 11, 2025, the Central Bank of the Republic of Türkiye (CBRT) announced its final interest rate decision of the year. The Monetary Policy Committee reduced the one-week repo policy rate by 150 basis points, lowering it to 38 percent.

This decision aligns with market expectations and reflects the Central Bank’s assessment that the disinflation process is continuing, although inflation risks remain present.

Key Interest Rates After the Decision

Following the decision, Türkiye’s main policy rates stand as follows:

• Policy rate (one-week repo):38 percent

• Overnight lending rate:Reduced from 42.5 percent to 41 percent

• Overnight borrowing rate:Reduced from 38 percent to 36.5 percent

The CBRT emphasized that monetary tightening will remain in place until price stability is firmly achieved.

Central Bank’s Economic Assessment

In its official statement, the Monetary Policy Committee highlighted several key points:

• Consumer inflation in November came in lower than expected, mainly due to food price developments

• After an increase in September, the underlying inflation trend softened in October and November

• Economic growth in the third quarter exceeded expectations

• Leading indicators for the fourth quarter suggest that demand conditions continue to support disinflation

However, the CBRT also underlined that inflation expectations and pricing behavior, although improving, still pose risks to the disinflation path.

Commitment to a Tight Monetary Stance

The Central Bank reaffirmed that its tight monetary policy stance will continue to support disinflation through:

• Demand management

• Exchange rate stability

• Anchoring inflation expectations

The size and timing of future interest rate steps will be determined cautiously, on a meeting-by-meeting basis, with a strong focus on inflation data. The CBRT also stated that if inflation deviates significantly from interim targets, monetary policy will be tightened further.

Signals for Credit and Deposit Markets

The statement also included an important signal for financial markets. If unexpected developments occur in credit or deposit markets, the CBRT may support monetary transmission through additional macroprudential measures. Liquidity conditions will continue to be closely monitored, and liquidity management tools will remain actively in use.

How This Decision Affects Foreign Investors

For foreign investors, business owners, and individuals considering Türkiye:

• Borrowing costsmay gradually ease, particularly for Turkish lira–denominated financing

• Real estate transactionsmay become more accessible for buyers using local financing

• Deposit yieldsremain high, continuing to attract foreign capital

• Currency and inflation risksremain relevant and must be carefully managed

At Bayraktar Attorneys, we regularly advise international clients on how interest rate decisions impact:

• Real estate acquisitions and financing structures

• Corporate investments and capital planning

• Asset protection and currency exposure

• Cross-border fund transfers and compliance

2025 Central Bank Interest Rate Timeline

For context, the CBRT’s interest rate decisions throughout 2025 were as follows:

• January 23, 2025: Reduced from 47.5 percent to 45 percent

• March 6, 2025: Reduced to 42.5 percent

• April 17, 2025 (Interim decision): Increased to 46 percent

• June 19, 2025: Held at 46 percent

• July 24, 2025: Reduced to 43 percent

• September 11, 2025: Reduced to 40.5 percent

• October 23, 2025: Reduced to 39.5 percent

• December 11, 2025: Reduced to 38 percent

Our Legal and Strategic Support

Bayraktar Attorneys assists foreign investors and expatriates with:

• Structuring investments under Türkiye’s evolving monetary conditions

• Evaluating financing and leverage risks

• Real estate transactions and compliance

• Corporate planning and cross-border asset management

If you are considering investing, restructuring assets, or entering Türkiye’s market, interest rate movements should always be evaluated together with legal, tax, and regulatory implications.