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 Central Bank of Turkey are widely expected to keep the one-week repo rate on hold at 45%, having very likely concluded its rate hiking cycle last month.
- The unexpected resignation of former Governor Hafize Gaye Erkan and subsequent appointment of Fatih Karahan is unlikely to result in any significant shift in the central bank’s stance on monetary policy, as Karahan stuck a hawkish tone at a presentation of the Bank’s new inflation outlook earlier this month.
- Accordingly, none of the sell-side previews we have collated in this document are expecting any change to the repo rate.
See the full MNI preview, with a summary of sell-side analyst views, here:
Last month, the CBRT delivered a 250bp increase to the one-week repo rate, bringing the policy rate to what is widely expected to be a terminal rate of 45%. The central bank stated that monetary policy is now tight enough to establish disinflation (suggesting no further rate hikes are forthcoming) but left the door open to reassess should inflationary threats re-emerge.
The most notable development in Turkey over the past month was the resignation of former Governor Hafize Gaye Erkan. Erkan cited ‘personal reasons’ for her departure, though criticism had been mounting over the role of her father in central bank matters. But unlike previous replacements of top central bank officials, the appointment of Fatih Karahan is unlikely to result in any material shift in the central bank’s more orthodox stance on monetary policy. In his first public appearance at a presentation of the central bank’s new inflation outlook, Karahan suggested that even if the central bank does not deliver further rate hikes, it is likely to maintain its tight stance for some time. As a result, a ‘hold’ decision at this juncture is seemingly inevitable.
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.