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Policy Statement Broadly Neutral; Macroprudential Tools Preferred

CBRT
  • All-in-all a generally neutral statement from the CBRT, with little signal in the policy statement that rates will either or fall on a near-term horizon.
  • Instead, the bank again point to macroprudential measures (curbing loan growth, promoting Liraization, tweaking collateral requirements for TRY-denominated bond portfolios) as the preferred tool to improve the transmission mechanism.
  • They also continue to see a deceleration in price pressures going forward ("expects disinflation process to start on the back of measures taken"), suggesting they see little need to tweak rates in the very near term.
  • USD/TRY briefly slipped lower upon release, but losses quickly correct - USD/TRY back to generally pre-rate decision at 17.36 at typing.

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