Turkiye’s central bank said its monetary policy isn’t on a preset path, providing little indication on the size of future interest-rate cuts after it began lowering borrowing costs last month.

Governor Fatih Karahan on Thursday pledged to keep a tight policy stance, saying that policymakers will assess the level of rates at each individual meeting, looking at actual inflation, expectations and risks to the outlook.

“We’re absolutely not on autopilot,” Karahan said during a press conference in Istanbul, where he unveiled his latest inflation forecasts. “Current expectations are above our inflation forecasts. This continues to pose a risk to disinflation and requires us to maintain our tight and determined stance.”

The bank’s quarterly inflation report is closely monitored by investors, who take cues from any changes to official predictions as they try to gauge the likely policy path. Karahan said the bank’s year-end inflation target remained at 24% for 2025, while putting its predicted inflation within a range of 25%-29%.

He also raised his end-2026 target by four percentage points to 16%, citing food costs and price inertia. The monetary policy chief provided little guidance when asked whether policymakers would consider cuts similar in size to last month’s 300-basis-point reduction at the remaining three meetings of this year.

“It’s positive that the central bank raised its projection range for both this year and next. More realistic figures are important for them to restore market confidence,” Batuhan Ozsahin, chief executive officer of Istanbul-based asset manager Ata Portfoy, said.

Karahan said the bank would start providing separate sets of short-term forecasts and interim targets, a departure from the current convention. In the past, the inflation report only included projections that were taken by investors as short-term targets. The bank’s official mandate is to bring inflation rate down to 5%.

“The Central Bank of the Republic of Turkiye has rebranded its inflation forecast so that it’s now an interim target, a move aimed at rebuilding credibility with markets,” Bloomberg Economics’ Selva Bahar Baziki said. “We think the central bank’s policy guidance from the new inflation forecast backs our baseline view for a contained easing of the policy rate.”

Inflation rates have been above the midpoint of the bank’s range of expectations unveiled in May, Karahan said. The composition of domestic demand remains “balanced” as a result of the bank’s policy stance and policymakers aren’t considering any easing of credit growth limits, he said.

The Turkish lira was steady during the governor’s press conference, trading at 40.7881 per the US dollar at 11.38am local time.

The central bank resumed lowering borrowing costs in July for the first time in four months and kept the door open for further cuts. Policymakers had to reverse an earlier cycle of rate reductions to stem a market fallout after a political spat triggered by the jailing of Istanbul mayor.

Keeping Turkish assets attractive has been a challenge since, with foreign outflows from Turkish stocks and government debt reaching nearly $4bn through August 1, according to the most recent official data.