Citi interest rate forecast for the Central Bank: Rates to be held steady until November

Citigroup Inc. economists have projected that inflation in Turkey will be recorded at around 45 percent by the end of this year, while estimating that the Central Bank of the Republic of Turkey (TCMB) will remain on hold until November.

According to a report by Bloomberg, economists including İlker Domaç stated that a deeper-than-expected slowdown in economic activity "increases the risk of an early easing."

According to the economists, the TCMB's inflation-fighting strategy, which relies heavily on the exchange rate, may be less effective if service prices do not respond to exchange rate discipline.

REPO RATE REMAINED AT 50 PERCENT

The Central Bank of the Republic of Turkey (TCMB) kept its policy rate steady for the fifth consecutive time while maintaining its hawkish rhetoric.

As in previous meetings, the TCMB kept the one-week repo rate at 50 percent, citing the need to "take into account the lagged effects of monetary tightening."

The Board maintained the hawkish statements from previous decision texts, such as "reiterating its cautious stance against upside risks to inflation," "maintaining a tight monetary policy stance until a significant and sustained decline in the underlying trend of monthly inflation is achieved and inflation expectations converge to the projected forecast range," and "tightening the monetary policy stance in case a significant and persistent deterioration in inflation is foreseen."

News Source: 12punto