Central Bank to announce the first interest rate decision of the new year today! What do economists expect?

The Central Bank of the Republic of Turkey (CBRT) will hold its first Monetary Policy Committee (MPC) meeting of the new year today. The steps to be taken are being closely watched by the markets. 

The AA Finance expectation survey for the meeting was concluded with the participation of 14 economists. 

Economists expect interest rates to be increased by 250 basis points at this meeting as well. 

According to the survey results, all participating economists predict that the policy rate will be increased by 250 basis points to 45 percent.

YEAR-END FORECAST IS 38.75 PERCENT

The economists' year-end policy rate expectations stood at 38.75 percent.

"WILL BE COMPLETED AS SOON AS POSSIBLE" MESSAGE WAS GIVEN

In the MPC meeting held last month, the policy rate was increased by 250 basis points to 42.50 percent.

The Central Bank had announced that they anticipate completing the monetary tightening steps as soon as possible.

34-POINT INTEREST RATE INCREASE IN 2023

The Central Bank has taken upward steps in the last 7 meetings. The total increase in interest rates this year amounted to 34 points.

The Central Bank has been tightening monetary policy since its meeting in June. At the June meeting, the Central Bank took an upward step in interest rates, ending the reduction process after 27 months.

The committee, which held its first meeting in June under the leadership of the new governor Hafize Gaye Erkan, had raised the policy rate by 6.5 points to 15 percent.

The Central Bank raised the policy rate by 2.5 points to 17.50 percent at its July meeting.

Continuing the interest rate hikes at the August meeting, the Central Bank increased the rate to 25 percent with a 7.5-point hike.

At the September meeting, the policy rate was increased by 500 basis points from 25 percent to 30 percent.

Continuing the interest rate hikes in October, the Central Bank had raised the rate to 35 percent with another 500-basis-point increase.

At the November meeting, the policy rate was increased by 500 basis points from 35 percent to 40 percent.