ISTANBUL
Economists on Thursday said that the Turkish Central Bank’s interest rate decision – keeping them unchanged at 8.25% – was surprising.
Although a surprising decision, it is actually fully rational, Piotr Matys, emerging markets strategist in Robobank, told Anadolu Agency.
He added: “The key question is whether it is a pause in the easing cycle or the end of it.”
The Central Bank’s sixth meeting this year of the Monetary Policy Committee (MPC) on Thursday decided to keep the one-week repo auction rate constant at 8.25%.
In May, the Central Bank cut its interest rate 50 basis points to 8.75% from 9.25%, and since the beginning of this year, the bank has cut the rate 375 basis points.
Last year, the bank cut the rate gradually by 1,200 basis points from 24% to 12%.
Economists had expected a 25-50 basis points interest rate cut today.
Jason Tuvey, a senior emerging markets economist at Capital Economics, said: “Turkey’s Central Bank unexpectedly left interest rates on hold today.”
“Ahead of the meeting, it was thought that rates would be cut, [but] we now expect rates to be left on hold over the rest of this year and next,” he underlined.
Tuvey also said a rebound in external demand would also help to limit any further deterioration in the current account.
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