Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive summary:
- The CBRT are expected to keep rates on hold following guidance in the March meeting statement that current rates are now “adequate” to support the economy.
- Sell-side are uniform in seeing rates held at 8.5%, though some analysts note that there is a risk of one last token cut ahead of the tightly contested elections on May 14th.
- With consensus gravitating around an unchanged decision from the CBRT this month, there are scant expectations for a notable market reaction to the decision.
See the full MNI Preview including sell-side analyst views here:
The CBRT left the one-week repo rate unchanged at 8.5% in March and once again described rates as “adequate” following 50bps of easing in February. The accompanying press release reiterated that the level and underlying trend of inflation has been improving in recent months but noted that conditions threatening global financial stability have emerged. The statement was otherwise little changed and repeated previously offered guidance that the effects of the earthquake in H1 will be closely monitored. Some sell-side analysts interpreted the decision as hawkish as many observers had expected the CBRT to lower its benchmark rate by 50bps.
The central bank’s FX reserves continue to face downward pressure having dropped sharply in recent years due to market interventions, and this may explain why rates were not eased further in March, nor indeed are they expected to be eased in April. Moreover, the USD/TRY exchange rate continues to trade at fresh highs while 1M implied volatility has spiked, showcasing the mixed success of increasing government measures to contain TRY fluctuations.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.