After the Fed’s 75 basis points increase in interest rates yesterday, the Bank of England increased by 50 basis points today.
With a recent statement, the Central Bank of the Republic of Turkey cut the policy rate by 100 basis points to 12%.
In the statement made by the Central Bank, the following statements were made regarding the interest rate cut:
“The Monetary Policy Committee (the Committee) has decided to reduce the one-week repo auction rate, which is the policy rate, from 13 percent to 12 percent.
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.
The Board foresees that the disinflationary process will begin with the re-establishment of the global peace environment, together with the steps taken and determinedly implemented to strengthen sustainable price stability and financial stability.
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 framework, 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. In order to institutionalize price stability in a sustainable way, the CBRT continues to review a comprehensive policy framework that encourages permanent and strengthened liraization in all policy instruments.”
After the interest rate cut decision, Dollar/TRY is trading at 18.37 levels.