The Central Bank of Turkey will keep the interest rate at 40%.
Bank of America expects that the Central Bank of Turkey will keep the effective funding rate at 40% during the meeting on April 22. Economists do not anticipate any changes, but the possibility of a rate hike remains relevant amid ongoing inflation risks.
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Bank of America predicts that at its meeting on April 22, the Central Bank of Turkey will keep the effective funding rate at 40%. The question of further changes to the rate remains under discussion.
Economists do not expect any changes to the effective funding rate at the upcoming monetary policy committee meeting. The Central Bank is considering two options: either maintaining the weekly repo rate at 37% with funding at the upper limit, or raising the repo rate to 40%.
Improved global sentiment and the rebuilding of reserves increase the likelihood that the weekly repo rate will remain at 37%. At the same time, there is still a possibility of a 300 basis point hike to 40% to strengthen confidence.
Rising inflation risks and the need for financing support arguments in favor of a rate increase. Currently, the effective funding rate stands at 40%, while the weekly repo rate is 37%.
The final decision on the rate will be announced by the Central Bank of Turkey on April 22. The meeting is taking place in a context where it is necessary to balance issues of confidence and improving external conditions.