The Central Bank’s Monetary Policy Committee (PPK) surprisingly lowered the policy rate by 200 basis points from 18% to 16%, while the market expectation was a 50-100 basis point interest rate cut. USD/TRY, which stood at 9.27 prior to the PPK’s decision, reached 9.54 and broke another record. EUR/TRY tested above 11.11 for the first time in its history and gold broke a new record at TRY 543 per gram.
For the economy world and markets, the most important part of the PPK statement was its assessment that ‘supply-side transitory factors leave ‘limited room’ for the downward adjustment to the policy rate’. The Central Bank has given a forward-looking direction for the first time in a long time, according to experts. Market players say the clearest direction was given and it’ll be discussed what the ‘limited room’ is now. The policy rate cut may change between 100-200 basis points in the next two months and the interest rate may end the year at 14-15%, according to the economy world. But contrary to the directive this month, a possible 100 basis point interest rate cut at the PPK’s meeting in November may stir the market again.
The grey listing of Turkey by the Financial Action Task Force (FATF) was unfair, according to the Ministry of Treasury and Finance. “Despite coordination studies, putting our country on the grey list has created a result that is unwarranted,” the ministry said in a statement. “For the period after this, all necessary steps will continue to be taken with FATF and related institutions to ensure that our country would be removed from this unwarranted list within the shortest time,” it added.
The Union of Chambers and Commodity Exchanges of Turkey (TOBB) will release established and liquidated company figures for September (10.00 am).
The Central Bank will release financial services statistics and the Financial Services Confidence Index for October (2.30 pm).