Reuters announces survey results ahead of Central Bank decision: Will interest rates be hiked?

Reuters has announced the results of its survey conducted with economists. The survey noted that the interest rate was increased by 500 basis points in March, following a pause in the aggressive tightening cycle in February, citing the deterioration in the inflation outlook.

DREW ATTENTION

It drew attention to the fact that President and AKP Chairman Recep Tayyip Erdoğan has reversed the low-interest-rate policy he advocated to support economic growth, having raised rates since June 2023.

Stating that economists predict the Central Bank will not cut interest rates until the 4th quarter, Reuters indicated that policymakers have stated they will maintain a tight stance until a significant decline is observed in the underlying trend of monthly inflation.

FORECAST FOR 2025: INTEREST RATES WILL FALL

According to the survey results, which state that the interest rate will be reduced by 250 basis points in the 4th quarter to 47.5%, it was reported that further decreases will be seen next year and that this rate will reach 30.0% by the end of 2025.

Reuters' report mentioned that Central Bank Governor Fatih Karahan said at a panel held in Washington that the interest rate hike cycle has ended and that inflation is on track to reach the 36% target by the end of the year.

On the other hand, it was explained that economists hold the view that Turkey will close this year with an average inflation rate of 44.2%.