Goldman Sachs predicted that the policy rate, which was increased to 45% in Turkiye, would decrease by 20 points to 25% by the end of the year.
Goldman Sachs Group Inc economists predicted that the Central Bank of the Republic of Turkiye could make a sharp move towards monetary expansion and interest rates could fall by 20 points by the end of the year.
According to the report prepared by Goldman Sachs economists Clemens Grafe and Basak Edizgil, with the rapid decline in inflation starting from the third quarter, the CBRT will reduce the policy rate from 45% to 25%.
This rate stood out as the lowest estimate among the estimates compiled by Bloomberg.
In the report written by Grafe and Edizgil, it was evaluated that “With inflation falling faster than the markets priced, we think that, contrary to the current market pricing, it would not be too early to start the easing cycle in the middle of the year.”
The Central Bank of the Republic of Turkiye (CBRT) increased the policy rate to 45% on Thursday and gave the message that the required level of stringency had been reached.
Goldman’s interest rate cut expectation indicates that there is a more optimistic inflation expectation than the CBRT’s 36% inflation forecast.
Source: Patronlardunyasi / Prepared by Irem Yildiz