Summary of the Monetary Policy Committee Meeting (2026-32)

Summary of the Monetary Policy Committee Meeting

1.    As a result of the growing uncertainty amid geopolitical developments, energy prices started trending up again. The duration and extent of uncertainties regarding energy supply, supply chains, and transport costs will continue to be decisive for the future trajectory of energy prices.

2.    Due to geopolitical developments, growth forecasts for 2026 regarding the Middle East and Africa continued to be revised downward. On the other hand, growth rates are expected to recover in 2027, supported by favorable base effects. Accordingly, the weak and fragile outlook is expected to continue globally, and the global growth index, which is weighted by the export shares of Türkiye’s foreign trade partners, is projected to increase annually by 1.7% and and 2.5% for 2026 and for 2027, respectively.

3.    Due to the volatility in commodity prices, upside risks to global inflation persist. While central banks remain vigilant about these risks, they also take into account the unfavorable effects of these developments on growth and employment. The policy rate pricing suggests that expectations of rate hikes have been maintained in advanced economies. The persistence of the supply shock caused by geopolitical developments and the degree to which it will disrupt inflation expectations are key considerations for the course of global monetary policy. Recently, increased uncertainty and fluctuations in risk appetite have led to capital outflows from emerging stock markets, with downside risks to portfolio flows remain elevated at the same time.

4.    The average four-week growth rate of retail loans rose to 2.7% in the June 12- July 17 period on the back of the acceleration in general-purpose loans. The average four-week growth rates of Turkish lira (TRY) commercial loans remained unchanged at 2.4% and that of foreign currency (FX) commercial loans adjusted for exchange rates rose to 0.7%.