The Central Bank of the Republic of Türkiye (TCMB) will announce its decision regarding the policy rate today (October 22) following the Monetary Policy Committee (PPK) meeting. While market expectations regarding the interest rate decision vary, some institutions maintain their forecast for a cut, while others estimate that the interest rate will be left at its current level.
MAJORITY OF ECONOMISTS EXPECT A 100 BASIS POINT CUT
Following the interest rate cut decision it took in January, the TCMB kept the policy rate at 37 percent throughout the year, also influenced by the US-Israel and Iran war that began in February.
Of the 20 economists participating in the AA Finance expectation survey, 19 expect the policy rate to be cut by 100 basis points to 36 percent in October.
A similar picture emerged in the Bloomberg HT survey. Of the 17 economists participating in the survey, 15 project that the TCMB will go for a 100 basis point interest rate cut this month.
JPMORGAN LOWERED ITS INTEREST RATE CUT FORECAST
US-based investment bank JPMorgan assessed that internal political developments in Türkiye have increased risks regarding the inflation and interest rate outlook. In line with these developments, the bank lowered its interest rate cut expectation while raising its inflation forecasts.
In an analysis published on October 20, JPMorgan projected that the TCMB would cut the policy rate by 100 basis points instead of 150 basis points at the October meeting.
The analysis stated that political developments continue to pose upside risks to price pressures and interest rates.
GOLDMAN SACHS AND SOCIETE GENERALE EXPECT THE INTEREST RATE TO REMAIN STEADY
US-based investment bank Goldman Sachs and France-based Societe Generale estimated that the TCMB would not change the policy rate in October.
In Goldman Sachs' analysis dated October 7, it was assessed that the necessary conditions for interest rate cuts to begin have not yet been met.
Societe Generale, in its assessment dated October 20, projected that the Central Bank would adopt a cautious stance at the October meeting due to inflation expectations maintaining their high levels.
INFLATION TARGET CHANGED IN THE MEDIUM-TERM PROGRAM
The Medium-Term Program (OVP), covering the 2027-2029 period, was announced on September 6. In the new program, many targets set in the previous year were revised.
While the inflation expectation was raised in the program, the date projected for bringing inflation down to single-digit levels was also pushed back by two years.
News Source: 12punto
