2023-06-19 16:08:02
Gradual lift or a one-time big raise?
Deutsche Bank expects to raise the official rate initially to 20% in June, in line with the median estimate of 20% in a Bloomberg survey of 20 economists. Likewise, “Bank of America” and “Deutsche Bank” suggest that the guidelines for the Turkish authorities indicate other, less severe increases in the following meetings.
Beyond interest increases, other factors are just as important, says Deutsche Bank’s Kristian Witoska, pointing to comments from the new central bank governor, Hafiza Ghaya Arkan, about the authorities’ commitment to monetary tightening and the adoption of macroprudential measures.
Investors are asking the Turkish Finance Minister for a reliable economic plan
Imamoglu expects Bank of America to gradually “relax” regulation, making a large one-time increase in deregulation “less likely”.
The Turkish lira has fallen 16% since the elections on May 28. Last week, the Turkish Central Bank’s monthly survey showed that market participants doubled their expectations for a 7-day repo rate hike from 8.5% to 17% at the June 22 meeting.
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