TEPAV Proposes Raising Net Interest Rate to 40% at the Central Bank of Turkey

TEPAV has recommended that the Central Bank of the Republic of Turkey (TCMB) raise the net interest rate to 40%. The study argues that a tighter interest rate environment is necessary to bring inflation down to a sustainable level within the current monetary policy framework. The research notes that, due to persistently high inflation and expanding money supply, increasing the net interest rate would be a critical tool for achieving the central bank’s policy objectives. A 40% net interest rate would provide a more effective signal for the TCMB’s goal of price stability. The TCMB’s current policy focuses on lowering short‑term rates to support economic growth. TEPAV contends that this approach may be insufficient to combat inflation and that raising the net interest rate would tighten the money supply and strengthen price stability. The study offers recommendations on macroeconomic indicators and monetary policy tools that the TCMB should consider when making policy decisions, arguing that raising the net interest rate could be an important step toward long‑term economic stability. This is not investment advice.