The Central Bank of the Republic of Türkiye (CBRT) is expected to continue its easing cycle at its first policy meeting of the year, according to surveys.

The central bank is likely to deliver a 150-basis-point cut this Thursday, similar to the move in December, bringing its benchmark one-week repo rate down to 36.5%, polls by Anadolu Agency (AA) and Reuters showed.

Last month, the bank lowered its key policy rate by 150 basis points to 38%, cutting at the upper end of market expectations, as data over the previous two months suggested that disinflation was back on track.

Türkiye has pursued tight monetary and fiscal policies since mid-2023, which helped bring inflation down to 30.9% in December.

That marked the lowest rate since November 2021 and compared to 44.4% posted a year earlier and the peak of 75.45% in mid-2024.

Morgan Stanley said the CBRT could maintain a steady pace of easing, balancing improved underlying inflation trends against heightened data uncertainty in the months ahead.

"Improving momentum in headline and core inflation as well as the continued broad-based improvement in inflation expectations could result in a bigger cut. On the other hand, the minimum wage hike as well as technical uncertainty related to methodological CPI revisions could prompt the CBT to be more cautious and deliver a smaller rate cut than we expect," Morgan Stanley said in a note.

All 20 respondents in the Reuters poll forecast the bank to cut its benchmark rate this week. While 17 economists expected a 150-basis-point cut, three respondents predicted a smaller cut.

The Independent Industrialists' and Businessmen's Association (MÜSIAD) President Burhan Özdemir on Tuesday said they do not expect dramatic cuts such as 250-300 basis points.

"I expect a cut of around 150 basis points. Even 200 would be a surprise," Özdemir told the private broadcaster CNBC-e.

"What matters is inflation. January is a month when we must act cautiously," he added.

"The CBRT may take a more balanced approach in its rate cuts from now on."

With the new year price updates and 27% increase in the minimum wage, inflation over the next two months could be volatile, CBRT Governor Fatih Karahan said in a presentation to investors last week, adding that lower inertia in services prices would support disinflation over 2026.

The central bank has pledged to reach its 16% interim inflation target by the end of 2026. The bank projects 2026 inflation between 13% and 19%. It sees it falling to 9% in 2027.

The Reuters poll, conducted between Jan. 14-19, suggested the central bank will continue easing and bring its policy rate to 28% by the end of the year. The poll saw the central bank cutting the key rate next year as well, bringing it to 24% by mid-2027.

Gross domestic product (GDP) growth is expected to average 3.5% this year, before picking up to 4% in 2027, according to the median forecast of 23 economists.

Based on its three-year policy road map, the government predicts 3.8% GDP growth this year and 4.3% next.

Türkiye's current account deficit is expected to be 1.5% of GDP this year and 1.6% in 2027, median forecasts showed.