Economists Predict Increase in Repo Rate for Turkey’s Central Bank Meeting

Economists participating in Anadolu Agency (AA) Finance’s expectations survey regarding the Monetary Policy Committee (MPC) meeting of the Central Bank of the Republic of Türkiye (CBRT) next week predict that the one-week repo rate would likely be increased.

Expectations Survey for Monetary Policy Meeting

AA Finance’s expectations survey for the monetary policy meeting, which is set to take place on Aug. 24, concluded with the participation of 15 economists.

Change in Policy Rate Expectations

The median expectation of economists regarding the change in the policy rate is an increase of 250 basis points.

According to the survey results, economists anticipate an increase of 100 to 250 basis points having the policy rate expectations ranging from 18.50% to 20.00%, while year-end policy rate expectations vary between 20% and 30%.

Previous Rate Hikes

The central raised its policy rate by 650 basis points in June to 15%, before increasing it by another 250 basis points to 17.5% last month.

Monetary Tightening Process

The MPC decided “to continue the monetary tightening process in order to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration of pricing patterns.”

The bank said it would keep raising borrowing costs “as much as needed in a timely and gradual manner” to ease inflation.

Inflation Rate Update

The annual rate of inflation, as measured by the consumer price index (CPI), has eased to 38.21% as of June, marking a significant regress from a 24-year high of 85.51% last October. However, it rose again to nearly 48% last month due to the lira’s decline and various tax hikes and officials have acknowledged it would rise further toward the year-end.

Interest Rate Decision Announcement

The central bank is set to announce its interest rate decision at 11 a.m. GMT (2 p.m. local time) on Thursday.