Striking forecast for Turkey from Netherlands-based bank! Will interest rate hikes slow down?

The Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee will meet this week. The new interest rate decision to be taken at the meeting is awaited with curiosity.

While investors are focused on the interest rate decision to be announced by the Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee (MPC) this week, forecasts regarding the interest rate decision have also begun to arrive from international financial institutions.

"THE CENTRAL BANK MAY SLOW DOWN"

Economists at the Netherlands-based banking company ING predicted that the Central Bank would slow down with a 250 basis point interest rate hike. The economists' analysis was as follows:

“The latest inflation data released in October showed that the main trend has started to improve not only in core inflation but also in headline inflation.

In this direction, we expect the bank to consider a slower increase of 250 basis points by raising the policy rate to 37.5 percent at this month's MPC. However, given the strong tightening moves since August, the risks (for interest rates) are on the upside.”

40 PERCENT FORECAST

In an emerging markets report published mid-week, ING economists predicted that the CBRT would stop at a 40 percent interest rate after two 250 basis point hikes. The report stated, “We expect the policy rate to be 40 percent with upside risks, following two 250 basis point hikes in November and December.”

The report also stated that the depreciation of the Turkish Lira is likely to continue in 2024.

WHEN WILL THE CENTRAL BANK ANNOUNCE THE INTEREST RATE DECISION?

The Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee will announce its interest rate decision on Thursday, November 23, at 14:00, under the chairmanship of Central Bank Governor Hafize Gaye Erkan. At the MPC meeting held last month, the policy rate was increased by 500 basis points to 35 percent.