US-based investment bank Goldman Sachs announced that its economists will refrain from making predictions about interest rates in Turkey.
Analysts of the bank stated that it is difficult for them to predict the interest rate without the guidance of policy makers, and it was stated that false predictions may occur due to uncertainty.
The inauguration of President Recep Tayyip Erdoğan’s new economy team created a positive atmosphere in the market, leading to the expectation of a rapid return from the low interest period. However, this also created a sharp divide among economists.
In the past weeks, the reflections of the interest rate hike on the markets were followed at the meeting led by Hafize Gaye Erkan, the Governor of the Central Bank of Turkey. According to the decision taken at the meeting, the policy rate was increased from 8.5 percent to 15 percent, while the interest rate expectation of the market was at the level of 20 percent.
Economists polled by Bloomberg presented their interest rate forecasts for this week’s meeting, with a range ranging from 17 percent to 20 percent. However, Goldman Sachs analysts, despite being dissident on the direction of Turkish monetary policy, stated that the median expectation was about 18 percent and stated that they did not see any reason to disagree with the consensus expectation.
“No Clarity And Consistency”
Goldman Sachs underlined the difficulty of estimating interest rates in Turkey without the guidance of policy makers, noting that there are wrong discussions on this issue. The Bank stated that policy makers should provide direction in anticipation of greater clarity and consistency in determining future policy steps.
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