CBRT Keeps Interest Rate Steady as Global Markets Await Fed Decision
While the CBRT kept its policy rate at 37 percent in September, global markets focused on energy prices and the outcomes of the upcoming Fed meeting.
The Central Bank of the Republic of Turkey kept its policy rate steady at 37 percent during its September Monetary Policy Committee meeting. In global markets, energy prices, U.S. inflation data, and the upcoming Fed meeting rank among the main agenda items.
Central Bank Interest Rate Decision
The Central Bank of the Republic of Turkey kept its policy rate steady at 37 percent at its September Monetary Policy Committee meeting. The overnight lending rate was maintained at 40 percent, and the borrowing rate at 35.5 percent.
Inflation and Risks
In the Central Bank's decision text, it was stated that the rebalancing in domestic demand continues and a decline in the inflation trend is observed. However, it was emphasized that risks originating particularly from energy prices are being closely monitored.
Real Economy and Predictability
The high-interest-rate environment increases financing costs, challenging the real economy. For industrialists and businesses, predictability for the future holds much greater importance than cheap financing.
Energy Prices and Global Markets
On the global front, supply concerns have emerged in energy markets under the influence of geopolitical risks. The volatility in oil prices affects transportation and production expenses, creating pressure on inflation.
U.S. Inflation and Fed Expectations
U.S. core inflation for August declined to 2.4 percent on an annualized basis. Markets are closely tracking the steps the Fed will take and potential interest rate decisions.