Turkey’s Orthodox Turn Meets Geopolitical Ambition

RBC BlueBay examines how Turkey’s return to monetary orthodoxy is colliding with a strategic pivot toward geopolitical leverage 

• After hiking rates to 50% in 2024 to tame >80% inflation, the CBRT has eased to 37%, targeting inflation in the low- to mid-20s; bank NIMs have rebounded toward ~4.5%.

• Macroprudential measures and rising NPLs (4 million individuals in default) highlight the social cost of tight policy and limited appetite for further hikes.

• Ankara is prioritizing energy-corridor ambitions and Kurdish rapprochement over rapid disinflation, shifting the policy mix toward political calculus.

Will geopolitical dividends compensate for slower structural reform? The full piece weighs the trade-offs.