Turkey's central bank raises year-end inflation forecast to 28%
MacroGeopolitics
Turkey's central bank has raised its forecast for inflation at the end of 2026 to 28%, up from a previous estimate of 26%, amid geopolitical uncertainty from the Iran war and volatility in energy and food prices. Central bank governor Fatih Karahan announced the new projection during a briefing in Istanbul on Thursday, August 13. A central bank survey last month found that markets expected year-end inflation of around 29%, while the central bank kept its inflation target unchanged at 24%. Although inflation slowed for a second consecutive month to 31.8% in July, the central bank continued to signal a tight monetary policy stance. Since the war erupted in late February, the central bank has used the 40% overnight lending rate as its main channel for providing liquidity to the financial system, instead of the 37% benchmark policy rate.
