Foreign Experts Anticipate Turkiye to Maintain Interest Rates

Foreign experts shared their expectations regarding the interest rate decision of the Central Bank of the Republic of Turkey (CBRT).

Generally, it is anticipated that the CBRT will keep the policy rate unchanged. However, it is noted that the bank might adopt a “wait-and-see” policy in its communication and could consider tightening further in case of an increase in inflation.

Marek Drimal, Strategist for Central and Eastern Europe, the Middle East, and Africa at Societe Generale, predicts that despite recent increases in inflation, the CBRT will not change the policy rate. Drimal explained that the reasons for the “wait-and-see” policy in the bank’s communication include recent macro-prudential tightening measures and expected improvements in the balance of payments. However, Drimal also mentioned the possibility of a 250 or 500 basis point interest rate hike. According to Drimal, the CBRT may keep the policy rate unchanged for the rest of 2024 and could implement a 500 basis point cut in the first quarter of 2025.

Piotr Matys, Senior FX Analyst at In Touch Capital Markets, also does not expect any changes in the policy rate. However, he indicated that if inflation increases in the coming months, the CBRT may need to tighten its monetary policy further.

Economists participating in the survey also expect the CBRT to keep the policy rate unchanged. The median expectation for the year-end policy rate is 45 percent.

source: aa.com.tr/ prepared by Melisa Beğiç

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