Markets turned to the CBRT’s interest rate decision. The Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee will meet tomorrow under the chairmanship of Central Bank Governor Şahap Kavcıoğlu. The interest rate decision will be announced at 14:00. While central banks all over the world are making tightening moves; The CBRT took a surprise rate cut decision last month and lowered the policy rate from 14 percent to 13 percent. Thus, the first interest rate cut of 2022 was realized. In the MPC text, it was stated that the updated policy rate level was sufficient under the current outlook. The Central Bank made the previous rate cut in December 2021 and skipped the next 7 meetings.
What is expected from the Central Bank?
Credit rating agency Fitch announced its forecast for the CBRT’s interest rate decision. The Fitch official expects the CBRT to keep interest rates constant until after the Presidential elections. Speaking in the webinar on commodity prices, inflation and increasing interest rates in Turkey, the Middle East and Africa, Fitch official said that they expect interest rates to be increased after the elections in Turkey. In the Reuters survey, the expectation for this month is that the policy rate will be kept constant at 13 percent, while the minority interest rate cut is also forecast. In the ForeksHaber survey, the median expectation was that the interest rate would remain constant at 13 percent. The average estimate in the survey pointed to a 50 basis point cut. While 8 of the 15 economists who participated in the survey predicted that the interest rate will be kept constant, 7 of them expressed their expectation that the rate cut will be decided. One of the economists predicted that the interest rate will be reduced by 50 basis points and 6 of them by 100 basis points. In the expectations survey of AA Finans, it was predicted that the interest rate would be kept constant. Nine of the economists participating in the survey, which was attended by 29 economists, expect a 100 basis point cut in the policy rate, and 1 expect a 50 basis point cut. In the Bloomberg HT survey, the expectation of a rate cut came to the fore. In the survey, in which 17 institutions participated, 9 institutions expect a discount. Eight of the institutions announced a 100 basis point rate cut and one 50 basis point rate cut expectation.
How much has the TL lost value?
The lira has lost less than 2 percent against the dollar since the surprise rate cut last month. The Turkish lira has lost close to 19 percent since the end of April, close to 28 percent since the beginning of the year, and 54 percent in the last year. The Turkish lira lost more than 40 percent of its value last year.
A professional writer by day, a tech-nerd by night, with a love for all things money.