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HomeEconomyTurkey's central bank stays put after meeting Erdogan's single-digit demands

Turkey's central bank stays put after meeting Erdogan's single-digit demands

ISTANBUL (Reuters) – Turkey’s central bank is expected to keep its policy rate unchanged next week, a Reuters poll showed on Thursday, with a decision to follow President Tayyip Erdogan’s decision. ) to end the cycle after cutting interest rates to 9%. single digit interest rates.

The central bank cut its one-week repo rate by 85 basis points in four months of its easing cycle amid signs of a slowing economy , although the inflation rate in November exceeded 85%, but the central bank will still announce the news is necessary.

Rate decision for December 85 GMT 17.

All 17 Economists polled by Reuters expect the repo rate to remain unchanged at 9% after The bank last month said it decided to end the easing cycle.

Economists say the path of monetary policy next year will depend on the outcome of the presidential and parliamentary elections scheduled for June 2022 at the latest.

Another victory for Erdogan could lead to a continuation of unorthodox policies that prioritize growth and exports, while the main opposition bloc will ensure the independence of the central bank, allowing it to raise interest rates .

Some economists in a Reuters poll see the policy rate being raised to 30% by the end of the year.

Turkey’s annual inflation moderated for the first time in 17 months in November, after touching 65.5% after the peak. This was largely triggered by the currency crisis resulting from the late 1100 easing cycle, which cut the repo rate by 85 basis points.

Erdogan, calling himself the “enemy” of interest rates, aims to boost investment, production, exports and employment while lowering interest rates under his economic plan. ​​

The central bank expects inflation to fall to 30.2% by the end of the year -2022, thanks largely to the so-called base effect.

The bank said it would achieve a permanent reduction in inflation once Turkey’s long-term current account deficit turns into a surplus under the new economic plan. Ankara sees no surplus in its economic forecast for the period covered by 2025.



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