CBRT Announces the Reason for Surprise Rate Cut Decision! Here are the details…

Central Bank of Turkey Republic Shortly before announced the interest rate decision.

In line with the decision taken, the policy rate was cut by 100 basis points. The expectation was for it to remain stable at 14%.

After the interest rate decision, the dollar rose to 18.24 on crypto currency exchanges.

While the surprise discount decision of the CBRT surprised the investors, recession risks were cited as the reason for the discount, and the following statements were used:

“The weakening effect of geopolitical risks on economic activity around the world continues to increase.

Global growth forecasts for the upcoming period continue to be updated downwards, and the assessments that recession is an inevitable risk factor are becoming widespread.

In the rise observed in inflation; The lagged and indirect effects of energy cost increases caused by geopolitical developments, the effects of pricing formations away from economic fundamentals, and strong negative supply shocks caused by increases in global energy, food and agricultural commodity prices continue to be influential.

Leading indicators for the third quarter point to a slight loss of momentum in economic activity. In a period when uncertainties regarding global growth and geopolitical risks increase, it is important that financial conditions are supportive in terms of sustaining the acceleration in industrial production and the increasing trend in employment.

In this context, the Board decided to decrease the policy rate by 100 basis points and evaluated that the updated policy rate is sufficient under the current outlook.