Eyes turn to the September 11 interest rate decision: Expectations of a 'major cut' for the Central Bank
London-based research firm Capital Economics predicts that the Central Bank of the Republic of Türkiye (CBRT) may take a significant step toward an interest rate cut at this month's meeting.
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The decline in inflation data announced by TÜİK strengthens the possibility of a loosening in the interest rate policy of the Central Bank of the Republic of Türkiye (CBRT). According to a report by Ekonomim, London-based research firm Capital Economics has brought the possibility of a strong interest rate cut to the agenda for the upcoming Monetary Policy Committee (MPC) meeting.
Capital Economics Chief Economist William Jackson emphasized that the downward trend in inflation provides the Central Bank with additional room for maneuver regarding interest rates. The drop in annual inflation to 33 percent in August revealed that price increases are losing momentum.
Stating that the easing in underlying inflationary pressures is noteworthy, Jackson assessed that, “This picture sets the stage for the CBRT to implement a large-scale cut at its meeting next Thursday.” In line with this, Capital Economics announced that they expect the one-week repo policy rate to be reduced by 200 basis points to 41 percent.