Istanbul Stocks Fall 3.08%, Close at Session Low as Central Bank Cuts Rates
Key Facts
Istanbul's main stock index closed the session on 22 October 2026 down 3.08% at 11,220.37 points, according to Investing.com data, extending the previous session's decline. The close marked the index's lowest level of the day, after it opened at 11,540.61 points. It reached an intraday high of 11,598.05 points before ending below its opening level. The previous session, on 21 October, ended at 11,577.12 points, a loss of 1.87%. Turkish stocks thus fell for two sessions, with a larger daily decline in the latest session than in the preceding one. Trading also showed that the index failed to hold its intraday high and finished at the bottom of its trading range. The performance coincided with the Turkish central bank's announcement of an interest rate cut, in a decision that addressed developments in domestic demand and prices.
The Turkish central bank, in its statement issued on 22 October 2026, cut its one-week repo rate from 37% to 36%. The decision also lowered the overnight lending rate from 40% to 39% and the overnight borrowing rate from 35.5% to 34.5%. The cuts thus covered both the weekly repo rate and overnight rates, with the lending rate remaining above the repo rate and the borrowing rate below it. In its accompanying assessment of economic conditions, the central bank said economic activity data pointed to continued weakness in domestic demand. Its assessment included the limited pass-through of supply shocks to domestic prices, alongside the signals from activity data. It described demand by saying "domestic demand remains weak," linking its assessment to these two factors. This reading of demand formed part of the economic backdrop the bank outlined when announcing the new interest rate levels.
Against the backdrop of developments in Turkey's stock market, MSCI announced in a statement dated the fifteenth of October that it was freezing certain adjustments to Turkish securities in its indexes. The firm said it would apply a "temporary freeze on certain index-related changes for Turkish securities," specifying measures covering inclusion factors, share counts, additions and upgrades. The decision included a halt to increases in foreign inclusion factors and share counts, both among the adjustments frozen under the statement. It also extended to additions to the Turkey Investable Market Index and stock upgrades between size segments. MSCI linked the measure to institutional investors' concerns about potential coordinated trading through fund holdings linked to some small companies. Those concerns related to the impact of such potential activity on the reliability of free-float estimates, which the firm cited among the reasons for the measure. It warned in its statement that this "undermines the reliability of free-float estimates and market integrity," explaining the background to the temporary freeze.
On inflation, the central bank said in its October statement that recent inflation readings and leading indicators confirmed a slowdown in the underlying inflation trend. It added that the slowdown was continuing despite monthly fluctuations, drawing on both recent readings and signals from leading indicators in its assessment. The bank had warned in the summary of its September meeting that "rising energy prices amid geopolitical developments pose an upside risk to the inflation outlook," placing energy among the risks surrounding the path of prices. According to the Monetary Policy Committee's official schedule, the summary of the October meeting is due to be published on 30 October 2026. The committee's next meeting is scheduled for 10 December 2026, according to the same schedule.