CBRT - Central Bank of the Republic of Turkey

22-SEPT-2023

CBRT Minutes (Thu): The CBRT opted to match market expectations with a 500bps hike to 30%. The Bank said tightening will continue until a significant improvement to the inflation outlook is achieved and will be further strengthening as much as needed in a timely and gradual manner. The CBRT also said it will continue to simplify and improve the existing micro and macroprudential framework. The release noted inflation readings were above expectations in July and August. Analysts at CapEco suggest the central bank is "now doing what many investors had hoped they would by raising interest rates sharply and taking a more serious stance against inflation", and "All of this is helping to maintain investor optimism in the policy shift and keeping Turkey's sovereign dollar bond spreads near multi-year lows." CapEco suggests a lot more tightening needs to be delivered, as the desk expects rates to rise to at least 35% by year-end.