The markets are focused on the Central Bank’s policy rate decision. The Central Bank’s Monetary Policy Committee (PPK) will convene under the presidency of the bank’s Governor Sahap Kavcioglu today. The PPK’s interest rate decision will be announced at 2.00 PM.
The Central Bank suddenly reduced the policy rate from 14% to 13% last month, while other central banks are tightening around the world. It was the first rate cut of the year. The Central Bank said in the PPK statement that the updated policy rate level is sufficient given the current outlook.
The international credit rating agency, Fitch Ratings, expect the bank to keep the interest rate steady until the Presidential elections. An official of the institution stated at a webinar on commodity prices, inflation, and increasing interest rates in Turkey, the Middle East, and Africa that they expect the policy rate to be increased after the elections.
The Reuters poll said the policy rate will remain unchanged at 13% this month while the minority expects another policy rate cut.
The interest rate will be kept steady at 13%, according to the median expectation of a ForeksHaber survey. The average estimation by participants surveyed points to a 50-basis point rate cut. While eight of the 15 economists surveyed said the policy rate will be kept steady, the remainder said that the bank would cut the interest rate. One of the economists estimated the rate at 50 basis points while six forecasted it at 100 basis points.
The policy rate will likely be kept unchanged, according to a survey by state news agency Anadolu Agency’s. However, nine of the 29 economists surveyed expect a 100-basis point rate cut while one estimates a 50-basis point cut.
A rate cut expectation was prominent in a Bloomberg HT survey. Nine of 17 surveyed institutions estimate a rate cut. Eight of them expect a 100-basis point cut while one of the institutions forecasts the policy rate cut at 50 basis points.
In the meantime, TRY has devaluated by less than 2% against the USD since the policy rate cut in August. TRY has depreciated by around 19% since the end of April, by nearly 28% since the beginning of the year, and has lost 54% of its value in the last year.
On the foreign policy side, an Astana format meeting on Syria between the foreign ministers of Turkey, Iran, and Russia was held yesterday in New York on the sidelines of the UN General Assembly. The meeting was attended by Foreign Minister Mevlut Cavusoglu, Iranian Foreign Minister Hossein Amir-Abdollahian, and Russian Foreign Minister Sergey Lavrov. UN Special Envoy for Syria, Geir Pedersen, also attended the meeting, according to the Foreign Ministry. While no additional information was released about the meeting, Cavusoglu said on Twitter that they are continuing “diplomatic efforts to find a political solution to the Syrian crisis.”
The Consumer Confidence Index increased by 0.3% from 72.2 to 72.4 in September, compared to the previous month, according to the Turkish Statistical Institute (TurkStat).
The Central Bank will announce the interest rate decision (2.00 p.m.).
The Central Bank will release weekly monetary and banking statistics (2.30 p.m.).
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Our Foreign Policy Columnist, Zeynep Gurcanli, says President Recep Tayyip Erdogan’s goal is to meet with U.S. President Joe Biden on the sidelines of the 77th UN General Assembly in New York.