After the elections, Turkey’s economic policy is changing completely compared to recent periods. Those involved in the economic management of the new government often give the message of “returning to traditional policies”. While the change in discourse continued, President Erdoğan’s silence on these issues caused hesitation in financial circles in the summer months.
However, Erdoğan took the floor at the Medium Term Program presentation and gave the message that he was behind the changing economic management. Erdoğan revealed that his stance had changed by using the words “tight monetary policy”, which he had not uttered for a long time.
Economists working at UK-based Barclays preferred to maintain their negative expectations regarding the CBRT’s interest rate decisions, despite Erdogan’s open support for a return to orthodox policy. According to Bloomberg, Barclays analysts expect the Central Bank to raise interest rates by 250 bp as a result of the MPC to be held next week.
Other major banks such as JPMorgan and Morgan Stanley expect an interest rate increase of at least 500 bp.
Barclays analysts expect more limited moves after the shock 750 basis point increase in August. Experts did not completely rule out the possibility of a higher interest rate decision. The UK-based banking giant expects the CBRT policy rate to be 35% at the end of the year in our country and 40% at the end of 2024.
The Central Bank of the Republic of Turkey will announce the interest rate decision on September 21 at 14.00 after the next MPC meeting.