2024-01-24 08:05:16
Turkish banks expect to start cutting interest rates in the last quarter of 2024
Turkish Banking Association President Alpaslan Çakir expected the Turkish Central Bank to raise interest rates one last time this week and begin a monetary easing cycle in the fourth quarter of this year.
“The rise in interest rates is coming to an end all over the world,” Cakir told reporters yesterday, Tuesday, in comments that were prohibited from being published before Wednesday. “I believe that Turkey will follow the steps to lower interest rates taken by the major central banks, and I expect that the cycle of lowering interest rates will begin in The last quarter”.
The Turkish Central Bank is expected to raise interest rates by another 250 basis points to 45% after the monetary policy meeting tomorrow, Thursday, which will mark the end of the sharp monetary tightening cycle, according to a Archyde.com poll.
The central bank said it would complete its tightening cycle soon, having already raised interest rates by 3,400 basis points since June, when Hafiza Ghaya appointed its governor and changed the unconventional approach the bank had followed for years.
Çakir, who is also CEO of the large state-owned Ziraat Bank, expected inflation to continue rising until May, before falling to about 40 to 45 percent by the end of the year, which is higher than the central bank’s year-end forecast of about 36 percent. .
Official data showed earlier this month that inflation in Turkey rose by 64.77% on an annual basis in December, continuing the upward trend expected to continue in the coming months after the large increase in the minimum wage.
On a monthly basis, inflation reached 2.93%, according to the Turkish Statistical Institute, compared to about 3.28% in November.
The Minister of Labor and Social Security, Widad Isik Han, announced last December that the minimum monthly wage would be raised to 17,002 liras ($578.31) in 2024, an increase of 49% from the level set last July, and an increase of 100% from January. January 2023.
Inflation rose after the currency crisis at the end of 2021, reaching its highest level in 24 years, which is 85.51% in October 2022. The value of the lira fell against the dollar by about 37% during the year 2023.
At the beginning of Wednesday’s trading, the price of the dollar approached 30.28 liras to the dollar.
Inflation began to decline on a monthly basis in recent months in conjunction with the monetary tightening policy.
Earlier this month, Moody’s credit rating agency revised the outlook for Turkey’s economy to positive from stable, attributing this to a decisive change in economic policy that improves the prospects of reducing the currently very high inflation rates to more sustainable levels. The agency maintained Turkey’s rating at “B3”.
(Archyde.com, Al-Arabi Al-Jadeed)
1706085208
#Turkish #banks #expect #start #cutting #interest #rates #quarter