How Much Will the CBRT Cut Rates in 2026? Brokerages Split After Surprise Move

Turkey’s central bank surprised markets with a larger-than-expected rate cut at its December meeting, deepening uncertainty over the monetary path for 2026. Several leading brokerages and economists published assessments that highlight one common theme: the easing cycle will continue, but at a measured pace—and not without risks.

BBVA Research: “A missed opportunity to surprise positively”

BBVA Research said the CBRT’s decision to cut the policy rate by 150 bps to 38%, despite strong economic data and sticky inflation, was perceived as a negative surprise.

The institution noted that most expectations centered around a 100–200 bps range, writing:

“The CBRT missed an opportunity to positively surprise markets by delivering a smaller cut.”

BBVA also emphasized that while domestic demand and inflation momentum remain strong, the CBRT maintained an optimistic tone around the disinflation process—raising concerns about the credibility of its projections.

Looking ahead, BBVA still expects 100 bps of cumulative cuts until the second half of 2026, arguing:

“Based on wage increases averaging 25%, a 21% nominal depreciation in the lira, and 4% GDP growth, we foresee end-2026 inflation at 25%—well above the CBRT’s 16% target. In this scenario, the policy rate may fall only to around 32% by end-2026.”

Gedik Yatırım: “No reason to accelerate rate cuts”

Gedik Yatırım warned that despite a softer November inflation print, underlying inflation dynamics show no broad-based improvement—especially in core indicators.

The firm stated:

“Given the sticky core inflation trend and the ambitious 2026 inflation target of 16%, we do not expect the CBRT to speed up rate cuts.”

Gedik expects rate steps of 100–150 bps per meeting, conditional on the inflation path, and stresses that the CBRT will remain restrained until at least the minimum wage adjustment and January inflation become clear.

Haluk Bürümcekçi: “Tone improved, but risks persist”

AA Finans analyst and economist Haluk Bürümcekçi described the CBRT statement as more optimistic than previous ones but still cautious.

He said:

“The CBRT emphasized improvements in the inflation trend, but also maintained a wide policy corridor and repeated macroprudential warnings—signaling continued caution.”

Bürümcekçi added that the bank remains ready to intervene with liquidity and macroprudential tools if credit behavior deviates from expectations.

Kuveyt Türk: “A more balanced tone emerges”

Kuveyt Türk Yatırım Araştırma Direktörü Dr. Kutay Gözgör noted that the 150 bps cut fell slightly below their expectation of 200 bps, but described the overall communication as stable:

“The language of the statement moved away from risk-focused commentary and toward a more balanced tone. We expect rate cuts to continue as inflation’s underlying trend improves.”

Kuveyt Türk projects policy rates at 28% by the end of 2026.

Ata Yatırım: “Rate cuts likely to continue in January”

Ata Yatırım Research Director Zeynep Erman said their expectation had been a smaller cut, but softer November inflation helped push expectations higher.

According to Erman:

“We believe the disinflation-friendly December inflation will allow the CBRT to continue cutting rates in January.”

Société Générale: “Another 150 bps cut is coming”

SocGen strategist Marek Drimal reiterated his expectation:

“We forecast another 150 bps cut in January following stronger-than-expected disinflation in November.”

Akbank: “No justification for a larger step”

Akbank Economics argued that nothing in the data justified increasing the cut size from 100 to 150 bps:

“We do not see any improvement in inflation dynamics that would rationalize a larger step. Reserve accumulation appears to be playing a stronger role in the bank’s reaction function.”

Akbank believes the CBRT’s implicit inflation target now sits closer to market expectations of 23%, based on the size of recent cuts.

İş Yatırım: “2026 total cuts may reach 1,000 bps”

İş Yatırım offered one of the most detailed rate path projections:

“We expect 150 bps cuts at each of the first four meetings of 2026, followed by 100 bps steps in the second half as disinflation slows.”

Their baseline forecast implies:

• 1,000 bps of total cuts in 2026

• Policy rate at 28% by end-2026

However, İş Yatırım warns that larger-than-expected increases in minimum wages or administered prices may force the CBRT to slow down cuts in early 2026.

Bottom Line: Markets expect cuts—but cautiously

Across brokerages, several themes dominate:

• Rate cuts will continue, but the pace is uncertain.

• Inflation remains sticky, and 2026 projections are well above the CBRT’s target.

• The January wage adjustment and administered price hikes will heavily influence the policy path.

• Most institutions expect policy rates between 28–32% by end-2026.

For now, investors remain skeptical that aggressive easing can continue without undermining the disinflation narrative the CBRT is trying to build.

IMPORTANT DISCLOSURE

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