Turkey’s Central Bank holds key interest rate at 37% amid inflation pressures

KATHMANDU: Turkey’s Central Bank has kept its main policy interest rate unchanged at 37%, marking the third consecutive month without any change as inflationary pressures persist amid rising geopolitical tensions in the Middle East.

In a statement following the Monetary Policy Committee meeting, the bank said ongoing geopolitical developments and the resulting uncertainty have kept energy prices volatile and elevated.

Turkey’s annual inflation rose to 32.6% in May, up slightly from 32.4% in the previous month, reaching its highest level in seven months, largely driven by sharp increases in energy costs.

Earlier in March, the central bank had already paused its easing cycle, warning that tensions linked to Iran and broader regional instability could trigger further market volatility and push inflation higher.

Reflecting sustained external risks and persistent price pressures, the bank also revised its inflation forecast for 2026 upward, raising it from 16% to 24%.