Attention turned to the CBRT decision in the country

While signals that the Fed will increase interest rates aggressively for the third time and that tightening will continue, domestic attention has turned to the interest rate decision of the Central Bank of the Republic of Turkey (TCMB). While the interest rate decisions of many central banks around the world are clear, the interest rate decision of the Central Bank of the Republic of Turkey will also be monitored domestically. The average expectation of economists participating in the Bloomberg HT survey is that the interest rate will be reduced by 50 basis points to 12.50 percent. In the survey conducted by the Bloomberg HT Research Unit and attended by 17 institutions, the median expectation was that the policy rate would be reduced by 50 basis points to 12.50 percent. While 9 institutions expected interest rates to be reduced, 8 of them announced an expectation of a 100 basis point rate cut and one announced an expectation of a 50 basis point rate cut. The TCMB made a surprise decision to reduce interest rates by 100 basis points at its Monetary Policy Committee (PPK) meeting in August. In the meeting in question, the reason for the reduction was indicated as “some loss of momentum in economic activity” and with the statement “Under the current outlook, the updated policy rate level was assessed as sufficient”, the expectation that there would be no further reductions gained strength. However, economists from Morgan Stanley, UniCredit SpA and Citigroup Inc. expect a relaxation step from the TCMB this month as well.