MNI: CBRT Hikes Inflation Projection, Holds Interim Targets

The Central Bank of the Republic of Turkey raised medium-term inflation projections in its Inflation Report on Thursday, with the impact of monetary policy expected to become more pronounced even as disinflation moderates

Inflation will be between 15% and 21% at end-2026 - versus 13-19% seen in November - and 6%-12% at end-2027, stabilising at “single-digit levels” at end-2028. Interim targets for 2026 and 2027 were unchanged at 16% and 9%, with a year-end 2028 target of 8%.

"Under the outlook in which monetary tightness is maintained and supported by macroprudential policies, the impact of monetary policy on demand conditions is projected to become more pronounced, and inflation expectations are expected to improve, the Bank said.

Governor Fatih Karahan said demand continues to support disinflation "albeit to a lesser extent," and highlighted increases in underlying inflation trends, "a longer-term measure."

"This picture is one of the reasons which require us to maintain our tight monetary policy stance," he said, adding that policymakers will "decisively continue to do whatever it takes to bring inflation down in accordance with the interim targets."