MNI CBRT Review - October 2022: November To See Single Digit Policy Rate

Executive Summary:

• The CBRT delivered a more sizeable-than-expected 150bps cut to the benchmark policy rate
• Bank signalled that further easing will likely follow in November
• Committee expects disinflation process to kick in next year

CBRTRevOct22.pdf

The assessment of inflation was broadly unchanged, explaining the recent increase in inflation by pointing to external factors and rising commodity prices. The Committee again noted that it expects the disinflation process to start on the back of strengthened measures to resolve financial stability, along with the resolution of the ongoing regional conflict.

The key part of the policy statement came toward the end of the release, disclosing that the CBRT “evaluated taking a similar step in the following meeting and ending the rate cut cycle”. This makes a further rate cut in November highly likely, and a 150bps step would put the headline rate at 9.00% and inline with Erdogan’s creed of single-digit interest rates by year-end.