Last Week’s Highlights: Domestic Interest Rate Surprise, BOJ and Fed Policy Shifts Abroad

While the surprise interest rate increase decision was discussed in the country last week, the agenda of foreign markets was the decision of the BOJ and the Fed, which ended the negative interest rate policy by increasing interest rates after 17 years.

  1. CBRT, which increased interest rates by 1.500 basis points, also expanded the corridor

The Central Bank of the Republic of Turkiye (CBRT) announced its interest rate decision. The bank increased the policy rate by 500 basis points. With the interest rate increase, the CBRT changed the operational framework and determined a margin of 3 points over the 1-week repo rate for overnight borrowing.

  1. Record increase in consumer loan interest

Consumer loans in deposit banks decreased by 0.15% last week to ₺1 trillion 504 billion 810 million 327 thousand, while a record increase in interest rates was observed. Consumer loan interest rates, which were 63.36% last week, were recorded as 76%.

  1. Partial payment period in BES starts on July 1

According to the decision published in the Official Gazette, the partial payment period in BES will start on July 1.

4. Fed kept interest rates unchanged, kept expectations for three cuts

The US Federal Reserve (Fed) kept the policy rate unchanged at the highest level in 23 years. Thus, the Fed kept interest rates unchanged in 5 consecutive meetings. In the statement, it was stated that more confidence in inflation was needed for interest rate cuts. The Fed kept its forecast for the federal funds rate unchanged at 4.6% for the end of this year, which it predicted in December last year. Chairman Powell stated that it would be appropriate to slow down the pace of balance sheet shrinkage in the near term.

5. Interest rate increase in Japan after 17 years

The Bank of Japan (BOJ) ended the negative interest rate policy it started in 2016. BOJ increased its policy rate from the range of -0.1% to 0% to the range of 0% to 0.1%.

6. Bundesbank expects recession

The German Central Bank (Bundesbank) announced that it expects a recession in the country’s economy in the first quarter due to the continuing decline in domestic and international demand for German industrial products.

7. Nvidia introduced its new artificial intelligence chip

US chip manufacturer Nvidia introduced its new artificial intelligence chip with its new generation chip architecture called “Blackwell”.

Source: Bloomberght / Prepared by Irem Yildiz

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button