İçimden Geldiği Gibi

The Articles of Agreement of the International Monetary Fund (IMF) contain fundamental provisions that regulate member states’ responsibilities regarding their foreign trade and exchange rate policies and the IMF’s authority to monitor these policies.

Under this article, member states agree to undertake specific responsibilities to promote economic growth and ensure price stability.

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If we take a brief look at these,

Member countries;

Pursuing monetary and fiscal policies that will not lead to disorder ( Stable Economic Policies ),

Not manipulating exchange rates in order to gain an unfair advantage in the balance of payments or to prevent effective adjustment ( Avoiding Manipulation ),

When it comes to exchange rates, they are obligated to exhibit a structure that is not interventionist but consistent with fundamental economic indicators ( respect for market conditions ).

In this context, the IMF is tasked with monitoring whether each member country is complying with these obligations. This process is known in the global economy as “Article 4 Consultations.” To this end, IMF delegations visit member countries annually, meeting with government officials, central bank governors, and representatives of civil society organizations to examine the country’s exchange rate, fiscal and monetary policies, and structural reforms.

Regarding Türkiye, the Staff Report prepared by the IMF Team for the Executive Board’s review on February 6, 2026, following discussions with Turkish Republic officials on economic developments and policies that concluded on November 14, 2025, was completed on January 26, 2026, and shared with the public recently.

The report actually emphasizes that the economic management has generally shown a successful performance. The most striking finding of the report is the “unexpected resilience ” the economy has shown despite all the shocks it has been subjected to.

The report states that the decline in inflation from 49.4 percent in September 2024 to 30.9 percent by December 2025—a drop of approximately 18 percentage points—thanks to tight monetary policy and fiscal discipline, confirms the success of the disinflation program, and emphasizes that behind this success story lie much deeper lessons that have reshaped Turkey’s financial architecture and social fabric.

economic theory says ‘high interest rates and tightening’ will halt growth, but Turkey has turned this theory into a “paradox,” noting that the Turkish economy grew by 4.1 percent in 2025 and similarly strong rates in 2026 (IMF’s 2026 growth forecast is 4.2 percent), and asks where this appetite for spending comes from when interest rates are so high.

The answer to this question isn’t something we don’t already know. The Central Bank said similar things at its latest inflation report meeting. Households , expecting high inflation, have reduced their investments in Turkish Lira-denominated assets and shifted a large portion of their savings to gold. According to the ‘ Household Expectations Survey’ published by the Central Bank on February 24, 2026, gold investment is by far the most preferred investment (February 55.5%). Investment in houses and shops is in second place with a high percentage (February 30.0%). Investment in time deposits is very low (February 3.1%).

As IMF experts have noted, the historic increase in global gold prices has created a massive “wealth effect” by multiplying the value of gold reserves held by the Turkish people. They interpret this situation as a hidden spending power that is counterbalancing the pressure created by high interest rates.

The report emphasizes the stickiness of services inflation (rent, education, healthcare). It notes that the share of services inflation in total inflation has risen from 30% to 55%, highlighting “inertia” as the most dangerous aspect. They argue that the factors making services inflation “dangerously sticky” are the historical indexation habits, where everything from school fees to rents is determined according to last year’s inflation, creating a vicious cycle that carries price increases over to the following year.

In a country that has been left to live with high inflation for a long time, and where economic decisions have caused inflation to rise even faster than in war-torn Ukraine, it goes without saying that this behavior is normal. And when we add to this the actions taken in the past to create the illusion of fighting inflation, it’s hardly possible to expect foreigners to understand the Turkish people’s attitude towards inflation.

The most surprising “defense” data in the report seems to come from renewable energy. They argue that Turkey’s investments in wind and solar energy are not only an environmental step but also serve as a strong “macroeconomic shield” against the current account deficit. I think this is an important finding.

They stated that the share of renewable energy in electricity production has reached 22 percent, reducing the economy’s sensitivity to fluctuations in global energy prices, and more importantly, Türkiye’s goal is not only to maintain the current situation but also to quadruple its wind and solar capacity between 2024 and 2035, adding that this structural transformation will permanently reduce the vulnerability of the current account deficit stemming from energy imports.

Then there is the much-debated Article 29 of the report.

According to the IMF;

The report suggests that the policy interest rate should be raised and kept above current levels until sequential inflation converges to the CBRT’s target; that despite rising real interest rates and credit growth caps, credit is growing in real terms and accelerating in 2025; that strong credit growth indicates that monetary policy is still not tight enough to bring sequential inflation to levels consistent with the CBRT’s targets; and that a higher real policy interest rate trajectory would support faster disinflation and increase the likelihood of achieving these targets.

He says that this can be achieved by bringing the policy rate closer to the final rate of 2024 (around 48 percent) and keeping the real interest rate high until it aligns with successive inflation targets.

We will see how the Central Bank of Turkey will respond to this warning, which comes just before the Monetary Policy Committee meeting on March 12.