Türkiye’s Inflation Fell to a Four-Year Low in November 2025 as Rate Cuts Continued

[سفير تركيا]

By December 2025, Türkiye had reached a different stage in its inflation cycle: annual consumer-price inflation had fallen to a four-year low, while the Central Bank had resumed interest-rate cuts after an earlier period of tightening.

The implications mattered to residents managing household costs, rent and borrowing; tourists planning a travel budget; and anyone considering lira savings or following the Turkish economy. This is a historical account of November–December 2025, not a statement of today’s rates or prices.

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1. What did the inflation figures show?​

• Annual consumer-price inflation fell to 31.07% in November 2025, approximately 31.1%, from 32.87% in October. It was the lowest annual rate since November 2021.
• Prices still rose by 0.87% over the month, roughly 0.9%. That was the smallest monthly increase since May 2023. The Central Bank described November inflation as lower than expected, largely because food prices surprised on the downside.
• For comparison, annual inflation had reached 75.45% in May 2024, close to the 75% figure often cited at the time. The subsequent fall represented substantial disinflation, while leaving the annual rate high.

The December 2025 Survey of Market Participants put the expected end-2025 rate at about 31.2%, broadly consistent with the roughly 31% outlook discussed at the time. This was a forecast, not a realised year-end result or a guarantee that the improvement would continue.

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2. What did the Central Bank do?​

• On 11 December 2025, the Central Bank of the Republic of Türkiye reduced its one-week repo auction rate from 39.5% to 38%, a cut of 150 basis points, or 1.5 percentage points.
• This was the fourth consecutive reduction in the sequence that resumed in July. The rate had been held at 46% in June, then cut to 43% in July, 40.5% in September, 39.5% in October and 38% in December: a total reduction of 800 basis points from the June level. There was no June cut.
• The Bank pointed to a slight improvement in the underlying inflation trend in October and November, while warning that expectations and pricing behaviour remained risks.

It continued to describe policy as tight and decisions as dependent on the inflation outlook at each meeting. It did not promise an uninterrupted series of further cuts. The size of the December decision should not be labelled “larger than expected” without specifying a reliable contemporary consensus.

The December survey still showed expected inflation above 30% for end-2025 and approximately 23.4% for end-2026. Those expectations illustrated that market participants did not regard the inflation problem as resolved.

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3. What was happening to gold and the lira?​

Gold is widely used as a store of value in Türkiye, but local physical-gold prices and international bullion prices are not identical. Product purity, transaction timing, exchange rates, dealer margins and supply conditions all matter when comparing them.

In a Reuters report carried on 8 December 2025, traders described the local physical-gold premium as having narrowed from more than 5% during the autumn surge to approximately 1.5%, which they characterised as its historical norm. They also reported easing domestic demand for gold and foreign currency, increased local gold supply and a dollar/lira rate around TRY42.5. The initial summary’s TRY42–42.5 range should be read as a period-specific approximation, not a fixed exchange rate.

These were attributed market observations, not an official nationwide premium series independently established here. They suggest that some of the earlier pressure had eased; they do not prove that all households had stopped buying gold or dollars, that supply had permanently normalised, or that the exchange rate had become risk-free. Comparing this episode with 2024 and early 2025 also requires care: the particular premium spike described in that report concerned autumn 2025.

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4. What did lower inflation mean for residents?​

Lower inflation means prices are rising more slowly; it does not mean they have returned to their old levels.

1. Bills and everyday spending
   • The cumulative rise in prices over the preceding two years remained substantial.
   • A monthly increase around 0.9% was gentler than increases of 3–4% seen in some earlier months. The comparison illustrates the change in pace, rather than promising that every household bill would rise by the headline rate.
2. Rent
   • Rent had been a major source of pressure during 2023–2024. A slower inflation environment could gradually reduce the pace of some renewal increases while leaving rent levels high.
   • The applicable tenancy rules and the relevant renewal date still matter. Slower inflation is not an automatic rent reduction, and this account should not be taken as announcing a new blanket legal cap introduced in 2025.
3. Pay and purchasing power
   • Without an adequate pay adjustment, annual inflation around 31% can still make a household’s income buy considerably less.
   • An increase below the inflation experienced by that household can reduce real purchasing power, even where national statistics improve. Individual spending patterns differ from the official basket.

The pressure had eased from its peak but remained intense. Better inflation figures did not, on their own, make everyday life comfortable or restore lost purchasing power.

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5. What did this mean for tourists?​

1. Costs in a foreign currency
   • A relatively steady exchange rate and slower local inflation can make a travel budget easier to plan. However, that does not establish that a trip priced in riyals, dirhams, dinars or another currency would cost the same as in mid-2025. Compare the actual rates and prices for the dates concerned, allowing for new shocks and currency movements.
2. Hotels, restaurants and local transport
   • Türkiye should not automatically be assumed to offer the very low foreign-currency prices some visitors remember from before 2022.
   • Certain meals or transport options may compare favourably with some European destinations, but there is no universal “cheaper than Europe” result. The city, quality, season and exchange rate can change the comparison.
3. Peak periods
   • Summer, public holidays and New Year can produce demand-related price changes that differ from headline inflation.
   • Compare offers and booking conditions in advance. An early reservation can help with planning, but it does not invariably secure the lowest price.

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6. What about saving or investing in lira?​

This article is not investment advice. A few distinctions are essential:

• The 38% figure was the policy rate following the December decision, not a guaranteed deposit return available to a saver. Comparing it with inflation around 31% gives a simple gap of roughly 7 percentage points; it does not establish a 7% real investment return.
• Even in a hypothetical same-period example with a 38% nominal return and 31% inflation, the exact inflation-adjusted return would be about 5.3% before tax and costs, using 1.38 ÷ 1.31 − 1. A forward-looking savings decision also needs expected inflation over the investment period, rather than only the previous year’s realised rate.
• Further rate reductions could support activity, but easing too rapidly relative to inflation and confidence could add pressure to the lira or prices. This is a risk to consider, not a prediction that every cut will have that outcome.
• The survey’s end-2026 inflation expectation remained above 20%, underscoring the uncertainty still facing savers. A person measuring wealth in another currency also faces exchange-rate risk.

For residents and overseas savers alike, follow subsequent Central Bank decisions and monthly inflation releases, and examine the actual product terms. A single encouraging headline is insufficient to assess a financial commitment.

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7. Conclusion​

• November 2025 inflation had fallen to roughly 31%, a four-year low, with a noticeably smaller monthly price increase.
• The Central Bank continued the rate-cutting sequence resumed in July, bringing the policy rate to 38% in December. Further decisions remained conditional on the outlook, with tightening possible if inflation departed materially from the intended path.
• Contemporary traders reported a narrower local gold premium and some easing of demand pressure. Those observations were a snapshot, not proof that the gold market or the wider economy had fully normalised.

For tourists, residents and people considering an investment, conditions had improved from the inflation peak but remained far from assured stability. Financial decisions should rest on continued monitoring, suitably qualified advice where needed, and the terms and risks of the actual commitment, rather than one optimistic or pessimistic headline.

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