Turkish exchange enjoys bullish opening to new year

• Index breaks 12,000 point barrier
• Low December inflation figure
• More interest rate cuts expected

Turkey’s Borsa İstanbul has ushered in the new year in buoyant fashion, with its blue chip index setting daily records in 2026.

The exchange’s BİST 100 index broke through the 12,000 point barrier on January 6, continuing a run of gains since the opening bell of 2026. 

The index is up more than 7 percent with a further, though more modest, advance on January 7. 

The new peak is a long way from the 9,000 points the BİST 100 fell to as recently as early June. 

This followed a bout of political and economic instability generated by moves to weaken the main opposition bloc, the Republican People’s Party, with the arrest in March of its candidate for the 2028 presidential election, İstanbul mayor Ekram Imamoğlu.

One of the main reasons for the sharp rise on the exchange is due to inflation coming in lower than expectations at just under 31 percent in December, according to Hikmet Baydar, an economist with 3. Göz Consultancy, raising the expectation of higher interest rate cuts in the new year. 

“This is seen as decreasing the financial burden on companies and a lower financial burden would increase company profits,” he told AGBI.

Turkish economy indicators

The central bank’s monetary policy committee is due to convene on January 22 for its first meeting of 2026, with speculation the lender could make a 150 basis point reduction to its key policy rate. 

This would take the bank’s one-week repo auction rate to 36.5 percent, after it announced a deeper than forecast 150 point reduction at its December 11 meeting. 

Another factor fuelling the market’s surge is an anticipated upgrade in Turkey’s credit ratings, Baydar said. 

“The rise is also being driven by expectation of an increase of Turkey’s credit note rating by the end of this month, the market having bought it already,” he said.

• Turkish exports hit record high in 2025, Erdoğan says
• Turkey ends 2025 with stronger economy despite high inflation
• Turkey raises minimum wage by a quarter

Leading ratings agencies Moody’s and Fitch are due to release their latest assessment of Turkey on January 23, with expectations that the improved economic climate will drive an upgrade.

Ratings Agency Fitch has a stable outlook for Turkey, with a credit rating of BB-, while Moody’s rating is Ba3, also with a stable outlook – both below investment grade. The two agencies last assessed their ratings for Turkey in July last year. 

An upgrade of Turkey’s credit rating could also spur greater interest in the stock market, though at three levels below investment grade it may take more to whet the appetite of foreign investors, with overseas holdings on the exchange at around 30 percent, less than half that of its peak in 2008.