Stating that the CBRT made a ‘hawkish surprise’, Morgan Stanley predicted that there would be no interest rate cut in 2024.
According to the news on BloombergHT, Morgan Stanley Economist Hande Küçük made the assessment that the latest interest rate decision and the statement published by the Central Bank of the Republic of Turkey (CBRT) support the estimate that the policy rate will remain constant for the rest of the year.
The report, released on Tuesday, said policymakers managed to deliver a “hawkish surprise” without changing interest rates and without giving any new signals on additional tools.
Küçük said that the CBRT’s verbal guidance clearly indicated that it was unlikely to initiate interest rate cuts before the monthly inflation trend fell to 1.5 percent sustainably and the gap between inflation expectations and the forecast range narrowed, and that “this does not leave much room for interest rate cuts in the near term.”
Küçük, who predicted that the changes made in the statement signaled an intention to keep interest rates constant for a longer period of time, stated that while there were signs that the slowdown in growth was increasing, the messages given reflected an aim to postpone expectations for easing steps to be taken in the near term.
