Central Bank under Fatih Karahan to announce interest rate decision today! What do experts say?

The Central Bank will announce its February interest rate decision today at 14:00. Economists have reached a consensus on the interest rate decision that markets are eagerly awaiting. Experts stated that they expect the TCMB to keep the policy rate steady at 45 percent.

The first interest rate decision of the era of Fatih Karahan, who was appointed as the Governor of the Central Bank of the Republic of Turkey (TCMB) following Hafize Gaye Erkan, will be announced today at 14:00.

Hours before the Central Bank's interest rate decision, which markets are eagerly awaiting, experts have announced their expectations. Experts predict that the TCMB will leave the policy rate unchanged at 45 percent.

INTEREST RATE EXPECTATION SURVEY FROM AA FINANCE

All economists participating in the Anadolu Agency (AA) Finance interest rate expectation survey stated that they expect the Central Bank to keep the policy rate unchanged.

REUTERS AND BLOOMBERGHT: INTEREST RATES WILL REMAIN STEADY

11 economists participated in the Reuters survey regarding the Central Bank's February 2024 interest rate decision. All of the economists predicted that the Central Bank would keep the interest rate steady at 45 percent. On the other hand, economists participating in the BloombergHT survey also expect the interest rate to be kept steady at 45 percent.

"IT WILL REMAIN STEADY AT 45 PERCENT"

Societe Generale Central and Eastern Europe, Middle East, and Africa Strategist Marek Drimal, in his assessment, predicted that the TCMB could leave the policy rate unchanged at 45 percent at tomorrow's Monetary Policy Committee meeting. Drimal also stated that there could be increases in the dollar/TL exchange rate. However, stating that the dollar could weaken in global markets and that Turkey's current account balance could improve due to seasonality, Drimal noted that it is likely that the fortunes of the TL will turn in the 2nd quarter after the local elections on March 31.

"TURKISH MARKETS MAY ATTRACT FOREIGN CAPITAL FLOWS"

Drimal stated, "As a result, Turkish markets may attract a new wave of foreign capital flows starting from the second quarter of 2024. This will most likely allow the TL to recover and achieve significant yield gains during the summer months."

INVESTORS MAY SEEK REASSURANCE ON INFLATION FIGHT

In Touch Capital Markets Senior FX Analyst Piotr Matys also predicted that the TCMB would leave the policy rate steady at 45 percent. Recalling Karahan's words, "The current level of the policy rate will be maintained as long as necessary. The monetary policy stance will be tightened if it is understood that factors such as inflation expectations, pricing behavior, public spending and tax policy, wages, and private consumption will lead to a significant deviation from our forecast in the inflation outlook," Matys noted that investors might seek reassurance that the TCMB will maintain its tight monetary policy until inflation is aligned with the target.

A 250 BASIS POINT HIKE WAS MADE IN THE FIRST INTEREST RATE DECISION OF 2024

The TCMB announced its first interest rate decision of 2024 in January and raised the policy rate by 250 basis points to 45 percent, in line with expectations. 

News Source: AA