MNI CBRT Preview - December 2025: Size of Cut in Question

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Executive summary:

• Analysts are split on whether the CBRT will cut the one-week repo rate by another 100bps at its final meeting of the year or accelerate the easing pace to 150bps.
• Despite a significant downside surprise to headline CPI in November, underlying indicators and consumer inflation expectations remain at uncomfortable levels, which may justify keeping the rate cut pace unchanged at 100bp/meeting, particularly as repricing effects and minimum wage negotiations add uncertainty to the outlook for inflation for 2026.
• Of the sell-side notes we have seen, expectations are slightly skewed towards a 100bp cut, but a 150bp move is far from ruled out.

CPI inflation data for November came in well below expectations. M/M CPI moderated to +0.87% from +2.55% in October – below the +1.35% expected and the first sub-1% reading since May 2023 – while the annual figure came in at +31% Y/Y (Est: +32%; Prior: +32%). Given that the soft print is almost exclusively explained by the correction lower for food prices, the CBRT may look through this print and instead focus on the underlying metrics. 

On this front, the CBRT noted in its latest assessment of monthly price developments that “underlying monthly inflation has declined to May level in November after the increase in September.” At the same time, inflation expectations have improved but are still elevated. Prior to this, the central bank stated in its Inflation Report that the underlying trend of disinflation had slowed but is not consistent with its inflation target of 16% for 2026, which would therefore require it to keep policy tighter than previously planned.