July 2026

The negotiations between the U.S. and Iran, which have been ongoing since April, took on a concrete form with the memorandum of understanding signed in June. Following this official move, which demonstrated that the parties had reached an agreement on ending tensions in the Middle East, the ensuing process strengthened expectations for a lasting peace. In line with the reopening of the Strait of Hormuz to traffic following the negotiations that began after the signing of the memorandum of understanding, oil prices fell rapidly to pre-March levels. On the other hand, conflicting statements regarding the issues still under negotiation are limiting optimism about the process.

While concerns over global inflationary pressures appeared to ease following the drop in oil prices, the U.S. nonfarm payrolls data coming in below expectations led to a slight decline in expectations that the Fed would raise interest rates in 2026.

The decline in global energy prices is limiting upward risks to inflation and the current account deficit in Türkiye. On the other hand, the tightening of global financial conditions and the persistence of geopolitical concerns are keeping uncertainties regarding the coming period alive.

In July, with a busy agenda, the NATO Leaders’ Summit in Ankara, credit rating assessments of Türkiye by Fitch and Moody’s, and the CBRT meeting scheduled for July 23 will be closely monitored.