Central Bank prepares to announce the first interest rate decision of the new year

As excitement grows in financial circles ahead of the upcoming Monetary Policy Committee (MPC) meeting, expectations regarding the Central Bank of the Republic of Turkey's (TCMB) interest rate decision are at the top of the agenda.

According to recent surveys, the majority of economists and market participants agree on the forecast that the policy rate will be lowered by 150 basis points.

A public survey conducted regarding the first MPC meeting of the year saw participation from 21 different individuals and institutions. 17 of the participants predicted a 1.5 percentage point (150 basis point) cut in the policy rate. Alongside these, 2 participants predicted a 200 basis point cut, 1 participant predicted a 100 basis point cut, while another participant stated they did not expect any change in the interest rate, but that there could be a 150 basis point reduction for the overnight lending rate.

When average expectations are taken into account, the policy rate is expected to fall to 36.55 percent. The median forecast stands at the 36.5 percent level.

There is a notable increase in interest rate forecasts for the end of 2026. In the latest survey, the average forecast for the end of the year was calculated at 28.75 percent. While participants' forecasts for this period ranged between 24 percent and 32 percent, it was emphasized that this level is higher than the previous survey. In the previous survey period, the year-end interest rate expectation was at the 28.5 percent level; in the new forecasts, this rate has risen to 29 percent.

The Central Bank's interest rate decision will be shared with the public on Thursday, January 22, at 14:00. The roadmap and messages to be included in the text to be published after the decision are also expected to be decisive on market pricing.

News Source: 12punto