As we approach to the weekend after a busy agenda at the international arena, the markets are focused on Central Bank’s interest rate decision. The interest rate, which has been set as 19%, is expected to remain unchanged, according to analysts.The Monetary Policy Committee (PPK) will keep the rate steady paying regard to the upward risks in inflation, Reuters’ survey reveals.
“We think that the Central Bank should keep the monetary policy tight as it should consider internal and external risks and factors that can make additional contribution to the inflation. That’s why we expect the interest rate to remain unchanged,” said Enver Erkan, Chief Economist of Tera Yatirim. He also noted that early interest rate cuts are considered risky in terms of the fundamental metrics of inflation and money movements to be created by global financial conditions.
Looking at the money market prior to the PPK’s interest rate decision, TRY has sharply depreciated after the Federal Reserve (Fed) has kept interest rates steady and hasn’t changed the asset purchase program. USD/TRY, which exceeded 8.63 yesterday, hovers around 8.61-8.62 this morning. EUR/TRY, which rose from 10.31 to 10.41 yesterday, is traded at just above 10.33.
Oil prices were suppressed due to strengthening USD, while the sharp decline in the U.S. crude oil stocks limits losses. Brent crude dropped by 0.6% to below USD 74 per barrel after it reached its highest level since April 2019.
Gold prices, which sharply fell after Fed’s decision, start to increase as investors saw decrease as a purchase opportunity. Spot gold saw USD 1,811 per ounce.
DAILY AGENDA
The private sector’s total outstanding loans received from abroad dropped by USD 2.2bn to USD 171.5bn as of April, compared to the of 2020, according to the Central Bank.
The Central Bank will announce the interest rate decision (2.00 pm).
The Central Bank and the Banking Regulation and Supervision Agency (BDDK) will release weekly money and banking statistics (2.30 pm).
The Parliament’s Committee on Public Economic Enterprises (KIT) will review 2017-2018 final accounts of Ziraat Bank and its subsidiaries.
