Deutsche Bank has published a report in which the CBRT’s rate hikes are forecasted. The bank stated that they expect interest rates to be raised to 20 percent at this week’s meeting, but that factors such as the CBRT’s language of communication are equally important as well as the size of the rate hike.
Deutsche Bank has published a report that includes the projections regarding the interest rate hike path of the Central Bank of the Republic of Turkey (CBRT). The Bank announced that the CBRT will increase the policy rate to 20 percent with an increase of 1150 points this week; He noted that they expect an additional 500 basis points increase in July due to the market reaction.
Deutsche Bank, in the report dated June 16 by Christian Wietoska, evaluated that after these rate hikes, there will be room to increase the policy rate to 30 percent for the rest of the year.
On the other hand, it was stated in the bank’s report that other possibilities were also taken into consideration. Deutsche Bank also ignored the possibility of a slightly less aggressive move to 18 percent or a much more aggressive front-loaded step to 25 percent, instead of the 20 percent rate forecast they put forward as the base scenario for this week’s meeting. stressed that it is not possible.
In the report, it was stated that real interest rates will continue to remain deep in the negative zone and that the CBRT will only try to catch up with TL deposit rates, and that factors other than the size of the interest rate increase will be equally important.
As an example, the Bank highlighted issues such as CBRT Chairman Hafize Gaye Erkan’s commitment to further monetary tightening if necessary, and how to use the language of communication in the text to be published after the decision.