Türkiye’s new medium-term programme stretches the disinflation path out to 2027, but still pitches a return to price stability as inevitable. The FX-protected deposit scheme is finally gone, the Lira is under pressure, and the central bank looks set to slow its easing cycle. Markets also welcomed the lifting of the short-selling ban, another step toward normalisation after last year’s political shock. Beneath the surface, the strain between growth, inflation and capital controls is still clear.
Monetary Policy
The Central Bank of the Republic of Türkiye (CBRT) is turning cautious. After July’s 300bp cut [see August brief], the market had pencilled in another big move this month. Now expectations are being trimmed to around 200bp as August inflation stuck close to 33% and GDP surprised on the upside. Rate cuts aren’t off the table, but the tone has shifted from “front-loading” to “measured.”
FX and Capital Controls
The FX-protected deposit scheme (Kur Korumalı Mevduat, KKM) has been clo...
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