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MNI CBRT Preview March 2022: CBRT Unmoved at 14.00%, Despite Surging Inflation

Turkey Central Bank
Turkey Central Bank

Executive Summary

  • CBRT is expected to leave policy unchanged at 14.00% this week in line with the unanimous consensus and remains in 'wait & see mode'
  • Analysts forecast headline CPI will peak at 60-65% in May/June, with risks skewed to the upside on the back of energy/food supply chain issues due to the Ukraine crisis
  • After a period of low volatility in Jan/Feb, lira weakness has returned with the CBRT and state banks struggling to keep promises for a stable currency with real policy rates at -40.44%
  • Despite increase inertia in proinflationary drivers, the CBRT is likely to continue favouring FX intervention and tweaks to the FX-linked deposit scheme over tightening policy

Full Preview Here:

CBRT Preview 17.03.22.pdf

The CBRT is broadly expected to keep rates on hold at 14.00% this week, retaining its commitment to keep rates low even in the face of spiralling inflation. Turkey’s acute supply-chain vulnerabilities to the Ukraine crisis continue to pose inflationary risks to pricing dynamics, which may be reflected in marginal phraseology changes in the statement. However, the CBRT remains resolute in its decision to favour FX interventions and tweaks to the FX-linked deposit scheme over rate hikes - resulting in unchanged policy settings in the near to medium-term.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
HomepageEM Central Bank ReportsEM Central Bank PreviewCEMEA Bank- PreviewCentral Bk Republic of Turkey - PreviewEmerging Market News
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
HomepageEM Central Bank ReportsEM Central Bank PreviewCEMEA Bank- PreviewCentral Bk Republic of Turkey - PreviewEmerging Market News

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