Turkish Central Bank in London & NY: Tackling Services Rigidity is Key to 16% Inflation Target by End of 2026

Central Bank of Turkey Governor Fatih Karahan highlighted during high-level meetings in London and New York that a decrease in price rigidity within the services sector is pivotal for the disinflation process in 2026. Addressing international investors, Karahan emphasized that the tight monetary stance will persist until price stability is firmly established, noting that inflation fell below 31% in December—the lowest since 2021.

The bank’s roadmap targets an inflation rate of 16% by the end of 2026. While the market anticipates a 150-basis-point rate cut in the upcoming January 22 meeting (to approximately 36.5%), the Governor reassured institutional banks that policy adjustments will remain strictly data-dependent, focusing on actual and expected inflation trends.