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JP Morgan See Sizeable Hike at June Meeting, If Not Earlier

TURKEY

As part of the need to tighten monetary policy, JP Morgan now see a rate hike in the next MPC meeting scheduled for 22 June, if not earlier. The first rate hike might be intended to close the gap between the policy rate and the average deposit rate. While the average deposit rates reached 25.9%, the TRY deposit rate with maturity of 1-3 months is at 33.9% as of 26 May. A policy rate hike to 25% from 8.5% is on the table for 22 June or earlier, they say, along with forward guidance suggesting smaller rate hikes if needed. JP Morgan maintain their year-end policy rate forecast at 30%, with risks on the upside.

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