Critical interest rate survey from Reuters! What are economists’ expectations?

Critical interest rate survey from Reuters!  What are economists’ expectations?

CBRT will announce its interest rate decision on Thursday, November 23 at 14:00. CBRT increased the interest rate by a total of 2,650 basis points in five meetings: 650 basis points in June, 250 basis points in July, 750 basis points in August, and 500 basis points each in September and October.

It is expected that the interest rate increase will continue this month, but its pace will slow down to 250 basis points.

While 21 economists participating in Reuters’ survey expect an increase in the policy rate at 35 percent, estimates are in the range of 37.5 percent to 40 percent. According to the survey, 16 economists expect an increase of 250 basis points in the policy rate, three economists expect a 500 basis point increase, one economist expects a 350 basis point increase and one economist expects a 300 basis point increase.

Central Bank Governor Hafize Gaye Erkan, at the inflation report meeting held at the beginning of November, said that a slowdown in inflation had begun on a monthly basis; However, he stated that it was too early to say that there had been a significant improvement in the inflation outlook.


According to CBRT forecasts, annual inflation will decline to 36 percent by the end of 2024, after peaking at just over 70 percent in May.

In its research note, Goldman Sachs, one of the institutions that expects the CBRT to increase the policy rate by 250 basis points in November, stated that domestic and foreign interest rates have approached the three-month averages since August, when the policy rate was increased by 750 basis points, and said:

“Lira deposit rates have also continued their sharp upward trend for the last two weeks… We think that convergence to market rates is an integral part of the return to the conventional and interest-based monetary system.”

According to CBRT data, the average return on three-month maturity TL deposits in the sector, which was around 15.5 percent at the beginning of the year, approached 46 percent as of the week of November 10.

In this way, the Goldman Sachs report points out that the CBRT will have the space to remove many of the macroprudential measures that are still in force and states: “Lira deposit rates will be supported by policy rate increases and macroprudential measures, especially with targets for the transformation of exchange rate protected deposit accounts into standard deposit accounts.” gave.


According to the Reuters survey, the CBRT is expected to continue increasing interest rates in December. In the survey, the median of end-2023 interest rate forecasts is 40 percent. Estimates are in the range of 40 percent to 45 percent.

According to the median of 9 economists who gave forecasts for the end of 2024 in the survey, with the expected decline in inflation, the policy rate may return to the level of 35 percent by the end of next year.

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