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 at their March meeting following guidance in February’s meeting statement that current rates are now “adequate” to support the economy.
- However, some sell-side analysts see another 50bps cut as the government looks to support both the earthquake recovery and President Erdogan’s re-election bid ahead of the May 14 vote.
- It is worth noting that the CBRT cut rates in September and October last year when rates had been described as “adequate” in previous policy statements.
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The CBRT cut the one-week repo rate by 50bps in February to 8.5% following a two-month pause, with the accompanying press release describing current rates as “adequate to support the recovery in the aftermath of the earthquake”. Data-wise, Turkish CPI jumped by +3.15% m/m in February, while prices accelerated by 55.18% y/y, marginally lower than anticipated though the decline was largely on the back of base effects. Furthermore, both GDP and industrial production figures beat expectations (GDP: +3.5% y/y vs. 2.9% expected; IP: +4.5% y/y vs. 2.1% expected). President Erdogan is likely to use the mechanical decline in inflation and uptick in GDP to claim victory over financial instability and as evidence of the success of his government’s low-interest policy.
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.