The Central Bank of the Republic of Turkey (CBRT) is expected to raise its policy interest rate to 45 percent, according to foreign experts, who have differing views on when interest rate cuts will be implemented.
Societe Generale’s strategist for Central and Eastern Europe, the Middle East, and Africa, Marek Drimal, stated that the CBRT could raise its policy interest rate by 250 basis points to 45 percent. Drimal also mentioned that the Monetary Policy Committee (MPC) is expected to complete its tightening steps at the December meeting.
Drimal suggested that the bank could use a cautious tone and continue quantitative and credit tightening measures by withdrawing liquidity from the market and controlling credit growth. He also highlighted the importance of maintaining tight monetary conditions for an extended period to ensure that inflation reaches the 5 percent target in the coming years.
Drimal emphasized that the duration for which the CBRT will keep its policy interest rate at 45 percent will be the next focal point for monetary policy. He also noted that the bank may refrain from lowering interest rates this year to ensure the slowing of inflation, which could potentially decrease to 4.1 percent by the end of the year.
Nick Stadtmiller, Market Research Chief at Medley Advisors, predicted that the CBRT would raise its policy interest rate by 250 basis points and could potentially conclude the interest rate hike cycle at the January meeting. Stadtmiller also suggested that inflation could start to decline after reaching its peak in May, and the bank could consider interest rate cuts afterwards.
A survey of economists conducted by AA Finans regarding the expectations for the CBRT MPC meeting indicated that the policy interest rate is expected to be raised by 250 basis points to 45 percent. The median expectation for the year-end policy interest rate among economists was 38.75 percent.