TURKEY: A Tight Monetary Policy & more – 11th Nov 2025

Merhaba from BA! This is the Rorshok Turkey Update from the 11th of November twenty twenty-five. A quick summary of what's going down in Turkey.

On Friday the 7th, the Central Bank said it will keep its tight monetary policy to fight inflation and is ready to raise interest rates again if needed, marking a shift from the previous month when the bank had steadily cut rates. The bank’s Governor said the goal is to bring prices down to the target set earlier this year, which are 24% for twenty twenty-five, 16% for twenty twenty-six, and 9% for twenty twenty-seven. Inflation slowed slightly in October, but the bank wants to stay cautious. Markets saw this as a signal that interest rates will stay high for a while.

On to taxes, on Thursday the 6th, Mehmet Şimşek, the Treasury and Finance Minister, said the government plans to update tax values to match the inflation target. He said the change aims to keep tax brackets fair and help control prices. The decision could lead to small adjustments in what people and companies pay, depending on how the new rules are applied.

Economists say the details are important — especially whether the new system will be linked directly to inflation or reviewed once a year.

On the diplomatic front, on Sunday the 9th, Hakan Fidan, the Foreign Minister, met with officials in the US. The visit focused on security, the situation in Gaza, and regional cooperation. It came as Turkey tries to balance its diplomatic ties with the US while also maintaining its strong position on Gaza and Syria. Discussions covered defense, counter-terrorism, and trade.

The trip drew attention because relations between the two countries have been tense at times, and both sides now seem to be looking for common ground.

However, they seem to be having some trouble finding it. On Tuesday the 4th, Devlet Bahçeli, the leader of the Nationalist Movement Party, criticized the U.S. ambassador for suggesting that Turkey and Israel might move from confrontation toward economic cooperation if the Gaza ceasefire holds. Bahçeli said the ambassador had overstepped by drawing Turkey into a course of action without its consent, and accused him of interfering in Turkey’s foreign policy.

The uproar has two roots: first, Turkey currently holds a trade embargo against Israel and publicly condemns its Gaza campaign. Second, Turkish public support for Palestine remains high, so talk of warming relations with Israel triggers strong nationalist sentiment.

The incident puts the government in a tricky spot, trying to preserve good U.S. ties while also remaining sensitive to public and nationalist opinion around Israel and Gaza.

Looking at regional alliances, on Monday the 10th, talks between Turkish and Iraqi officials focused on the next steps after the Kurdistan Workers’ Party, or PKK, announced it had withdrawn its fighters from Turkey to northern Iraq as part of a wider peace process. The PKK, which has fought Turkey since the nineteen eighties, said earlier this year that it plans to end its armed campaign and turn into a political movement instead.

Northern Iraq has long been a key base for the group, making coordination with both the Iraqi government and the Kurdish Regional Government in Erbil essential. Turkey now wants to verify that the withdrawal and disarmament are real before passing a new law to manage returns and reintegration. If successful, it could end a forty-year conflict that has shaped Turkish politics and regional security for generations.

On Thursday the 6th, human-rights groups in Turkey released reports on poor conditions in several prisons, including long solitary confinement and lack of medical care. The Human Rights Foundation of Turkey and other organizations said the system needs more transparency and inspections. The reports sparked questions in Parliament and calls for better oversight.

Families and lawyers said the biggest issue is access — prisoners often cannot contact relatives or lawyers easily. The government has not yet announced any new measures, but pressure from rights groups and European bodies is growing.

In some brighter news, on Friday the 7th, Alparslan Bayraktar, the Energy Minister, announced that the government will keep covering part of household electricity and gas bills, a policy first introduced during the pandemic and extended after the twenty twenty-two global energy price spike. The support includes direct discounts and state-funded subsidies that reduce what families pay each month. Bayraktar said the aim is to help people cope with high living costs while inflation remains above target.

The plan has eased pressure on millions of households, but experts warn that it puts a heavy strain on the budget. The government is expected to review the subsidies next year to decide whether they will be reduced, made more targeted, or continue through winter.

Back to the economy, Inspectors from the Financial Action Task Force, a global watchdog that checks how countries fight money laundering and terrorist financing, arrived in Turkey for a three-week review. Turkey was removed from the group’s grey list last year after it tightened financial controls, but the team will now check whether those reforms are still working. If Turkey doesn’t pass the inspection, it could lose investor confidence and see the lira drop again.

The visit comes as the government tries to show the economy is stable and that Turkish banks and crypto firms are being properly monitored.

On Thursday the 6th, tension deepened between Turkey, the world’s largest hazelnut producer, and Ferrero, the Italian company behind Nutella, over hazelnut supply and pricing. The Turkish Competition Authority said Ferrero had reduced its twenty twenty-five purchase commitment from 45,000 to 30,000 tons, blaming a weak harvest caused by frost and insect damage.

This dispute isn’t new. For years, Turkish farmers have accused Ferrero of using its purchasing power to keep prices low, since it buys about 70% of Turkey’s exports. Ferrero has denied manipulating the market, saying it simply follows supply and demand. The company even faced investigations in twenty twenty-two for alleged price control practices. Now, as hazelnut prices nearly double and harvests fall, both sides are again clashing.

On Sunday the 10th, Turkey marked the 87th anniversary of  Atatürk’s death with memorials across the country, the largest at Anıtkabir, his mausoleum in Ankara. Thousands attended, including President Erdoğan, government officials, military leaders, and citizens, to honor the founder of modern Turkey. Ceremonies included wreath-laying, moments of silence, and speeches reflecting on Atatürk’s legacy and vision for the nation. Municipalities and organizations held local events to remember his reforms and contributions.

Speaking of the memorial, on the same day, the police arrested Furkan Bölükbaşı, a social‑media user known for insulting opposition figures and posting offensive messages about  Atatürk, after he shared a post targeting the memorial at Anıtkabir.

In his posts, Bölükbaşı referenced  Adnan Menderes, a former Prime Minister who was overthrown and executed in nineteen sixty-one in a military coup. He said that Menderes’ downfall came from the goodwill shown to Kemalism, Atatürk’s founding ideology and vision for modern Turkey, suggesting the current government could face a similar fate if it did not “get in order.” His message was seen as a direct threat toward Erdoğan and his administration.

The current government and its base, which lean toward a more religious orientation, do not always fully embrace Atatürk’s secular vision. Erdoğan’s presence at the memorial may have caused discomfort among some supporters.

On Monday the 11th, European researcher May Hasan reported on a study examining Syrian refugees’ success as entrepreneurs in Turkey. Published in the International Business Review, the research found that Syrians thrive in business not just because of money or skills, but because they feel part of Turkish society.

Surveying 170 business owners, the study highlighted three key factors: a sense of belonging, mastery of the Turkish language, and early legal protection under the Syrians Under Temporary Protection program. Early recognition helped stabilize lives and reduce the effects of discrimination. Turkey’s cultural ties to Syria and supportive institutions allowed refugees to connect with local markets, gain customer trust, and turn the challenges of displacement into sustainable businesses.

Check the report with the link in the show notes!

Aaand that’s it for this week! Thank you for joining us!

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