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 left the one-week repo rate unchanged at 8.5% and reiterated that rates are “adequate” having held steady in March and April as well.
- As expected, the continued participation and intervention from state banks on currency rates muted any notable market reaction amid a recent pickup in TRY weakness.
- Market focus remains on the runoff election on May 28 and any potential pivot away from the ultra-loose policy stance of the incumbent regime in the likely event of an Erdogan win.
See our full preview with a summary of sell-side views here:
The press release once again reiterated that the level and underlying trend of inflation has been improving in recent months due to the policy approach and again acknowledged threats present to global financial stability. The most notable change to the policy statement was the addition of the following line – “Recent data show that economic activity in the earthquake zone has been recovering faster than expected, and it is becoming evident that the earthquake will not have a permanent impact on performance of the Turkish economy in the medium term” – in what was an otherwise identical statement to the April edition.
Ahead of the runoff vote on May 28, the central bank have been implementing further measures to rein in asset volatility. Bloomberg recently reported that the central bank asked some local lenders to purchase dollar bonds to provide a backstop to pressure on Turkish assets, while additional FX conversion targets were imposed for lenders last week, telling them to shift more hard currency into FX-protected TRY retail accounts.
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.