Interest rate forecast for the CBRT from TEPAV

The Economic Policy Research Foundation of Turkey (TEPAV) has projected that the Central Bank of the Republic of Turkey (CBRT) needs to raise its policy rate to 47.5 percent. According to TEPAV's "Monetary Policy Assessment Note," in light of the evaluations made, the one-week repo rate should be increased to 47.5 percent, and it should be indicated that additional tightening may be implemented depending on the data.

TEPAV assessed that "the practice of Turkish lira swap market transactions against foreign currency should be reviewed; the maturity of these transactions should be gradually shortened and their volume reduced."

TEPAV continued its assessment as follows:

"In our previous assessment notes, we pointed out the importance of announcing an official inflation target for the end of each year for the 2024-2026 period. Initiating such a practice as soon as possible would be an important communication policy tool for the Central Bank to rapidly close its credibility gap."

News Source: 12punto