Today, the Central Bank’s Monetary Policy Committee (PPK) will announce the policy rate decision. The economic world doesn’t expect a change from the current rate, which stands at 14%.
A Reuters poll showed that 18 economists don’t expect a change in the policy rate. However, the expectation of an interest rate hike before the end of the year has been included for the first time in this survey. Three out of 10 survey participants stated that the Central Bank would be obliged to raise the interest rate before the end of 2022 due to the pressure on TRY, rising inflation, and the interest rate hikes of other central banks. Their interest rate estimations were 15%, 20%, and 25%. Moreover, one economist expected the policy rate to be cut to 12%.
The U.S.-based investment bank Goldman Sachs, which also doesn’t forecast a policy rate change, said in its latest report that an interest rate cut is unlikely as long as inflation continues to increase and the current account balance deteriorates. The institution estimates that pressure will continue in the future and authorities should respond to this with new instruments and intervention in the foreign exchange market.
The Central Bank is unlikely to change the interest rate despite the policy threat factors stemming from rising inflation, according to Tera Yatirim Chief Economist Enver Erkan. He also emphasized that Turkey’s real interest rate is negative 47.1%, the lowest among developing countries.
Borsa Istanbul’s BIST 100 Index dropped by 0.14% to 2,460.43 points at yesterday’s close with a daily trading volume of around TRY 62bn after hitting an all-time high of 2,463.76 points at Tuesday’s close. However, the upward trend in the BIST 100 index has continued since March, according to Murat Barisik, Research Director of Ata Yatirim. The institution considers 2,500 points the resistance level in the surge. “We think that instant profit sales can occasionally be made. 2,420 points will be the support level for us in possible profit sales,” Barisik said. The institution also doesn’t expect an interest rate change. “Volatility will increase in the upcoming days when companies start to release their financial statements for the first quarter,” Barisik added. Ata Yatirim suggests adding companies with a solid foundation and story.
DAILY AGENDA
The private sector’s outstanding loans from abroad dropped by USD 1.3bn to USD 167.7bn in February, compared to the end of 2021, according to the Central Bank.
The Central Bank will announce the interest rate decision (2.00 pm).
The Banking Regulation and Supervision Agency (BDDK) and the Central Bank will release weekly money and banking statistics (2.30 pm).
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>> Impacts of the sanctions regime on businesses of Turkish origin
Sanctions imposed by the US or another country against Russia and Russian companies will not be imposed directly on Turkish companies under Turkish law. However, it has to be noted that the fact that these sanctions are not legally applied to Turkish companies does not mean that Turkish companies will not be affected by them in their activities and operations. The article recommends actions that can be taken by Turkish companies to reduce risk.
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