MNI CBRT Preview - October 2025: Data Warrants Slower Easing

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Executive summary:

• The CBRT is expected to moderate its easing pace from the 250bp reduction delivered last month following the sharp jump in monthly CPI in September.
• That would be consistent with the Bank’s data-dependent forward guidance, while central bank officials have underlined their commitment to ensuring inflation falls in line with the interim targets.
• Among sell-side, analysts lack clear consensus over the outcome of Thursday’s meeting, with estimates ranging from no change to the repo rate to a cut as large as 250bps. Most estimates are skewed towards a 100-150bp move.

Since the previous meeting, headline CPI inflation accelerated for the first time since May last year, rising from 33.0% Y/Y in August to 33.3% Y/Y in September and exceeding market expectations of a slowdown to 32.5% Y/Y. On a sequential basis, headline inflation accelerated meaningfully, jumping from 2.0% M/M (nsa) to 3.2% M/M. Seasonally adjusted inflation rose 2.7% M/M in September compared to a prior 2.5%.

Commenting on the data, CBRT Governor Fatih Karahan stated that underlying trend points to a “slowdown” in the disinflation process and stressed that the central bank will ensure inflation falls in line with interim targets. As per the CBRT’s latest Inflation Report, inflation is projected (with 70% certainty) to be between 25-29% at year-end, but the Bank is targeting an interim rate of 24% - a target it its widely expected to miss. Given the repeated data-dependent guidance, a slowdown in the easing pace appears inevitable this month, but questions remain over whether officials will pause the cycle entirely.