Turkey cenbank to hold rates on Nov 21, but cut coming soon
Repeats Nov 18 poll with no changes to text
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=TRINT%3DECI for poll
Policy rate decision on Nov 21
ISTANBUL, Nov 18 (Reuters) -Turkey's central bank is expected to hold interest rates steady at 50% in November, according to a Reuters poll on Monday that also pointed to a rate cut in December or January.
All 19 poll respondents expected the bank to hold rates at a policy meeting this week, which would mark the eighth straight month of steady policy after an aggressive tightening campaign that began in June of last year.
The bank was seen promptly moving to begin its anticipated easing cycle, with six respondents expecting this to begin in December and eight pointing to January. Only one predicted the bank would wait until the second quarter.
The first cut to the one-week repo rate was expected to be by 250 basis points to 47.5%, according to the poll median.
Monthly inflation rose a more-than-expected 2.88% in October on the back of food, clothing and shoes, and fell only slightly to stand at 48.58% annually in the same period.
The central bank raised its year-end inflation forecasts for this year and next to 44% and 21% respectively earlier this month and vowed to keep policy tight to ensure disinflation continues.
During the report presentation, Central Bank Governor Fatih Karahan said although it is shifting slower than expected, the main trend of inflation continues to improve.
To tackle inflation that has soared for years, the central bank has raised its policy rate by 4,150 basis points in total since mid-2023, reversing a previous low-rates policy championed by President Tayyip Erdogan to boost economic growth.
Goldman Sachs said in a recent note that the core momentum of inflation is running above the level necessary for the central bank to start cutting and monthly inflation improved only marginally in October.
"The new forecast for 2024 implies that the central bank kept its assumption for sequential inflation unchanged and expects headline price increases to average 1.5% mom...the risks are arguably skewed to the upside in the short run, given the upward surprises in recent months and food prices possibly adding more to inflation than we had anticipated," it said.
The central bank will announce its next interest rate decision at 1100 GMT on Nov 21.
Reporting by Ezgi Erkoyun and Susobhan Sarkar;
Editing by Jonathan Spicer
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
