All 10 economists polled by Reuters on the likely key rate decision the Turkish central bank will take on March 12 said they anticipated that the regulator would hold the benchmark at 37% in response to the market fallout from the US-Israeli war on Iran, the news service reported on March 6.

Capital Economics, meanwhile, said in a March 6 note to investors that the “Turkish central bank reportedly has already intervened heavily in the FX market to support the lira and it has suspended one-week repo operations, which has effectively tightened monetary conditions. Taken together with the rise in inflation in January, there’s no chance of another rate cut at the CBRT [Central Bank of the Republic of Turkiye] meeting on Thursday. We’ve pencilled in no change, but a hike can’t be ruled out.”

Prior to the outbreak of the conflict, the widely held expectation was that the central bank would continue with the easing cycle it began in late 2024. The loosening was temporarily reversed a year ago amid market instability caused by the jailing of Turkey’s top opposition politician Ekrem Imamoglu, but soon after the central bank returned to gradually bringing down the main rate.

Reuters also said the poll showed that the median estimate for end-2026 official inflation ​now stood at 29.75%, compared with 28% in the previous poll. Some respondent economists declined to make ​a prediction for now.

As the central bank last week started burning through FX reserves in the battle to defend the lira, analysts warned big oil and gas importer Turkey is set to be hard hit by a spike in energy costs caused by impacts of the war.

ING analysts said on March 3 that a 10% oil price increase would translate into a 1.1 percentage-point hike in Turkey’s consumer price inflation because of the country’s “complete dependence on oil imports”. 

On March 6, they added that a $10 increase in the Brent crude price would result in a $4-5bn rise in country’s current account deficit.