Call to the CBRT from Mahfi Eğilmez: 'If you believe in the inflation rate, cut interest rates'

The Central Bank of the Republic of Türkiye (CBRT) will announce its second interest rate decision of 2025 on Thursday, March 6, at 14:00. The CBRT began its interest rate cutting cycle at the final Monetary Policy Committee (MPC) meeting of 2024 and continued these steps in January 2025.

The Central Bank had announced that a total of 8 meetings would be held for 2025, and it had reduced the policy rate from 50 percent to 45 percent in the last two meetings. While markets are focused on whether the interest rate cutting cycle will continue, the recently released inflation data and the messages to be delivered by the CBRT are being closely monitored.

THE CBRT SHOULD CUT INTEREST RATES

Following the announcement of the February 2025 inflation data at 39.05 percent, economist and former Treasury Undersecretary Mahfi Eğilmez made a striking assessment regarding interest rate policy.

In a statement made via his social media account, Eğilmez noted that the Central Bank should shape interest rates according to inflation data and used the following expressions:

"If the CBRT truly believes that inflation has fallen to 39.05 percent, it should cut the policy rate by 2.5 to 3 points. Because in that case, there is no point in continuing to pay such high foreign exchange interest to carry traders and those converting from foreign currency to TL."

WHAT ARE THE MARKET EXPECTATIONS?

Markets are wondering whether the Central Bank will continue to cut interest rates based on inflation data. How the CBRT's decisions will be shaped in line with recent foreign exchange rates and inflation expectations is being closely followed by investors and economic circles.

On the other hand, while international credit rating agencies and market analysts emphasize the importance of tight monetary policy in the fight against inflation in Türkiye, the path the CBRT will follow regarding interest rate cuts is seen as a major question mark.

News Source: 12punto