Macro-financial risk
2026-04-26
9 minute read
5 sources
Turkey Monetary Normalization 2026: Orthodoxy Holding Versus Political Pressure
TCMB orthodoxy under Governor Karahan has stabilized the lira and rebuilt reserves, but disinflation is slowing, KKM unwind is incomplete, and political pressure for premature easing is rising heading into a fragile 2026 to 2028 horizon.
Turkey enters mid 2026 with the most credible monetary framework it has had in a decade. Governor Fatih Karahan and his deputies have held the policy rate restrictively positive in real terms, rebuilt gross reserves above 165 billion dollars, and cut headline inflation from a 75 percent peak in mid 2024 to roughly 32 percent by March 2026...