All eyes on the Central Bank's interest rate decision: What are the economists' expectations?

Economists participating in the AA Finance expectation survey regarding the Central Bank's MPC meeting predicted that the interest rate would be increased by 500 basis points to 35 percent. While all 19 economists expect an interest rate hike from the Central Bank, their forecasts ranged between 250 and 500 basis points. The economists' year-end policy rate forecast was 40 percent.

Following the elections and the change in the economic team, the TCMB abandoned its low-interest-rate policy. In June, at the first MPC meeting under the presidency of Hafize Gaye Erkan, a 650-basis-point hike was implemented, raising the interest rate to 15 percent. Interest rate hikes continued with 250 basis points in July, 750 in August, and 500 in September. Thus, the interest rate, which was at 8.5 percent before the elections in May, was raised to 30 percent with a total increase of 2150 basis points.

REPORT ON THE TCMB FROM GERMAN DEUTSCHE BANK

While the Central Bank's interest rate decision is awaited, a report regarding the TCMB has been released by Germany's Deutsche Bank. The bank brought forward its forecast for the Central Bank's policy rate to reach 40 percent, which it had previously projected for after the March 2024 elections. Deutsche Bank estimated that the Central Bank would continue monetary tightening with 250-basis-point hikes in both November and December, and that the interest rate would reach 40 percent by the end of the year.

News Source: 12punto