Central Bank to announce interest rate decision today! What do economists expect?

The Monetary Policy Committee of the Central Bank of the Republic of Türkiye (TCMB) will meet today (April 25) under the chairmanship of Governor Fatih Karahan.

The interest rate decision for April, which markets are closely watching, is expected to be announced at 14:00.

WHAT DO ECONOMISTS EXPECT?

The AA Finans expectation survey regarding the TCMB's Monetary Policy Committee (MPC) meeting was concluded with the participation of 16 economists.

The median value of the economists' expectations regarding changes to the policy rate was for the rate to be kept steady at 50 percent.

According to the survey results, economists' policy rate expectations ranged between 50 percent and 55 percent.

YEAR-END EXPECTATION IS 45 PERCENT

The median of the economists' year-end policy rate expectations was 45 percent.

At the MPC meeting held last month, the policy rate was increased by 500 basis points to 50 percent.

FOREIGN EXPERTS ANNOUNCE THEIR EXPECTATIONS

While foreign experts predict that the Monetary Policy Committee of the Central Bank of the Republic of Türkiye (TCMB) will keep the policy rate steady at its meeting, they stated that the lira's appeal could increase in the coming months due to the bank's policies and the projected improvement in the current account.

Inna Mufteeva, Natixis Economist for Central and Eastern Europe, Middle East, and Africa, said, "Considering the positive impact of the unexpected interest rate hike in March on the lira, which reinforced the current TCMB Governor's credibility and independence, the TCMB may want to see how this decision reflects on the Turkish economy from now on."

Stating that the lira has stabilized for a while and that at least the pace of depreciation has slowed, Mufteeva expressed that the positive trend in foreign exchange is therefore expected to alleviate some of the pressures stemming from domestic prices in the coming months.

Mufteeva noted that since the inflation data for April will be announced on May 3, it might be logical to wait for this good trend in price dynamics to be confirmed.

On the other hand, stating that communication and forward guidance could be clearly hawkish, Mufteeva predicted that, considering these factors, the current situation will continue and interest rates will be kept steady.

"WE EXPECT THE LIRA TO STRENGTHEN IN THE SECOND AND THIRD QUARTERS"

Marek Drimal, Societe Generale Strategist for Central and Eastern Europe, Middle East, and Africa, predicted that the TCMB would keep the policy rate steady at 50 percent.

Recalling the statements made by TCMB Governor Fatih Karahan in Washington, "Our top priority is fighting inflation and accumulating reserves as much as possible depending on market conditions," Drimal noted that the lira's appeal could increase in the second quarter of the year.

Emphasizing that the lira could be supported by the seasonal improvement in the current account following the acceleration of the tourism season and the effect of the TCMB's monetary tightening, Drimal assessed, "We expect the lira to strengthen in the second and third quarters."