Markets hold their breath: Central Bank to announce interest rate decision today!

The Central Bank of the Republic of Turkey (TCMB) will hold its Monetary Policy Committee (PPK) meeting today to announce its fourth interest rate decision of the year.

The interest rate decision of the committee, which will meet under the chairmanship of TCMB Governor Fatih Karahan, will be shared with the public today at 14:00. Following the decisions in January, March, and April, the fourth interest rate decision of the year is being closely monitored by the markets.

INTEREST RATES REMAINED UNCHANGED AT THE LAST MEETING

At the last PPK meeting held in April, the Central Bank kept the one-week repo auction rate, used as the policy rate, at 37 percent.

The Bank maintained its current monetary policy stance and did not make any changes to the interest rate.

GEOPOLITICAL DEVELOPMENTS ARE BEING CLOSELY MONITORED

During the previous meeting period, tensions between the US, Israel, and Iran had increased uncertainties in global markets. In a process where many central banks adopted a cautious approach due to these developments, the TCMB also paused interest rate cuts and kept the policy rate constant.

Volatility in energy prices and fluctuations in global markets were also among the topics followed by the Central Bank.

INFLATION AND GROWTH BALANCE WILL COME TO THE FORE IN THE DECISION

At today's meeting, the committee is expected to evaluate developments in the underlying trend of inflation and data regarding economic activity.

In its previous statements, the TCMB had indicated that if there is a significant and permanent deterioration in the inflation outlook, additional tightening steps in monetary policy could be on the agenda. For this reason, the messages to be given in the decision text are also important for the markets.

EXPECTATIONS ARE THAT INTEREST RATES WILL BE MAINTAINED

20 economists participated in the expectation survey conducted regarding the PPK meeting. According to the survey, while 17 of the economists predict that the policy rate will be maintained at its current level, 3 economists expect a 300 basis point interest rate hike.

The median expectation of the participants was that the policy rate would be kept constant at 37 percent.

On the other hand, the median of the economists' year-end policy rate expectations was calculated as 35 percent.

News Source: 12punto