Overnight interest rate falls below policy rate

As the BIST overnight interest rate fell to the 47 percent level, it dropped 2.87 points below the CBRT's one-week repo policy rate.

The increasing liquidity surplus in the market has been drawing attention in recent days. According to CBRT data, the liquidity surplus in the system rose to 462 billion TL as of May 21. This marks the highest liquidity surplus recorded since January.

Along with the liquidity surplus in the system, the recent horizontal trend in deposit interest rates has also come to the fore.

According to CBRT data, the average compound deposit interest rate for 1-3 month maturities has settled on a plateau at the 68 percent level.

POINTS TO A TIGHT STANCE

Although there are signs of de facto easing, such as the overnight interest rate falling behind the policy rate and the plateau in deposit interest rates, the messages from the economic administration indicated that the tight stance would continue.

CBRT Governor Fatih Karahan, who gave messages regarding the tight stance during the presentation of the year's second inflation report, most recently emphasized in his speech at the Qatar Economic Forum that they are aware of the risks in inflation and would not hesitate to take action on this matter.

Minister of Treasury and Finance Mehmet Şimşek also reiterated the message that fiscal policies would support monetary policies.

Speaking at the introductory meeting of the Financial Literacy Platform, Şimşek used the following expressions:

"Monthly inflation figures have now begun to align with our targets. With the monetary and fiscal policies we have implemented over the last year, I believe that inflation will very quickly see the 30s by the end of this year. Then, in the coming year, it will reach the 10s, in the following year single digits, and then we will pull it down to low single digits and keep it there."

News Source: 12punto