The markets are focused on the Central Bank’s interest decision and statements to be included in the summary of the Monetary Policy Committee (PPK) meeting. No interest change is expected which was set as 19%.
The PPK statement in the previous meeting was interpreted that the Central Bank ‘cracked the door open’ for the interest cut. However, interest cut expectations for May were eliminated following the Central Bank Governor Sahap Kavcioglu’s statements and release of the summary of the previous PPK meeting.
The general opinion is that the Central Bank will cut the interest rate in the upcoming months due to the weak outlook of TRY and upward risks in inflation. Although some economists expect that the interest rate will be cut in June at the earliest, the PPK will start to reduce interest in the third quarter, according to the market consensus.
The initial effect of the PPK meeting will be on the money market. At the time being, USD/TRY remains at yesterday’s levels this morning. USD/TRY stood around 8.35 for the most part of the day and declined to 8.32 yesterday. EUR/TRY appreciates above 10.00.
Oil prices increase following the sharp decline in the U.S. crude oil stocks after exportation. Brent crude exceeds USD 69 per barrel, while the U.S. crude oil reached USD 65.7. Gold prices, meanwhile, slightly increased after yields of the U.S. Treasury bonds decreased. Spot gold is traded at USD 1,793 per ounce.
The Central Bank will hold the 5th PPK meeting of the year (2.00 pm).
The Central Bank and the Banking Regulation and Supervision Agency (BDDK) will release weekly money and banking statistics (2.30 pm).