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ANALYSIS: Sell Side Upgrade Calls for 1w Repo Hikes & TRY Longs (1/2)

CBRT
  • SELL SIDE UPGRADES CALLS FOR 200BP 1W REPO HIKE & TRY LONGS.
  • Agbal made all the right noises about the need for policy tightening to achieve price stability, rebuild reserves without conducting FX purchases and rebuild CBRT credibility through a shift to policy orthodoxy
  • Although the 5% inflation target seemed decidedly ambitious.
  • Sell side have thrown weight behind more hikes, similar to those outlined in the November MNI CBRT preview
  • calling for a 200bp hike to reach 17% on the 1w repo, supported by a surprise spike in headline inflation.
  • While some said 100-150bp would be sufficient, we see the CBRT delivering exactly what the market wants (as per the previous CBRT) to avoid more dislocations in TRY assets.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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