Global banks expect Turkish rate cut later this year
International banks have published updated inflation and interest-rate forecasts for Türkiye following the release of July inflation data, with BBVA Research expecting the policy rate to decline to 36 percent by year-end if conditions allow, while Citi maintained a cautious stance on monetary policy and Goldman Sachs argued that interest rates may need to remain elevated for longer.
BBVA Research said it expects the cost of funding to begin normalizing toward the policy rate from September onward and, “provided conditions allow, the policy rate to decline to 36 percent by year-end.”
According to BBVA, the lagged impact of fuel-price adjustments, together with expected time-dependent price increases, could create upward pressure on inflation during August and September.
“Assuming a normalization in energy prices and a prudent policy mix in the second half of 2026, we maintain our 30 percent year-end inflation forecast,” it said.
