Turkey's Central Bank Holds Rate at 37% as Oil Surge Raises Imported-Inflation Risk

The Central Bank of the Republic of Turkey held its policy rate at 37% for a third straight meeting in June and warned that the recent rise in energy prices amid the regional war has lifted the underlying inflation trend. Turkey's annual inflation rate eased to 32.11% in June, slightly below the previous month's 32.61% and the lowest level since March.

Turkey imports about 90% of its oil and gas needs, making it one of the G20 economies most exposed to energy inflation. Brent crude passing $90 a barrel amid the Strait of Hormuz crisis has increased pressure on the lira and on the country's inflation expectations. The central bank's projections are based on an average oil price assumption of $89.4 a barrel for 2026.