Turkey’s central bank resumes weekly repo auctions at 37% policy rate

Turkey’s central bank is reopening a key liquidity tap for the country’s banking system, resuming one-week repo auctions at its 37% policy rate after suspending them earlier this year when the Iran conflict sent energy prices spiraling. The move amounts to a controlled easing of financial conditions without actually cutting rates. Banks that have been forced to rely on more expensive overnight lending facilities, where the rate sits at 40%, will now be able to access cheaper weekly funding at 37%. What the CBRT is actually doing The one-week repo auction is the CBRT’s primary policy tool for injecting liquidity into the banking system. When the Iran conflict erupted and energy costs surged, the central bank pulled this lever offline, forcing banks into the overnight corridor where borrowing costs range from 35.5% on the low end to 40% on the high end. The policy rate itself has been parked at 37% since January 2026, when the central bank trimmed it by a single percentage point from 38%. Turkish headline inflation peaked at 32.1% in June 2026 after the Iran war drove energy costs higher across the region. The fact that inflation has started to moderate from that peak is precisely wh...