Goldman Sachs Expects CBRT Interest Rate to Remain Unchanged
The US investment bank projected that the policy rate will be kept constant at 37 percent at the upcoming meeting.
Ahead of the Central Bank of the Republic of Turkey's upcoming interest rate decision, a prediction diverging from market expectations came from Goldman Sachs. The bank projected that the policy rate will be kept constant at 37 percent at the October 22 meeting.
Interest Rate Decision Expectation
US-based investment bank Goldman Sachs projected that the Central Bank of the Republic of Turkey will keep the policy rate constant at 37 percent at its meeting on October 22.
Pointing out that current economic conditions are not yet suitable to start interest rate cuts, the bank displayed a stance diverging from market expectations.
Operational Framework and Easing Assessment
The Central Bank's reopening of the repo window on August 23, resulting in an effective 300-basis-point drop in the overnight reference rate, came as a surprise to both the bank and the markets.
It was emphasized that this step by the Central Bank is not the beginning of a monetary policy easing, but rather evaluated as the normalization of the operational framework.
Inflation and Financial Stability Risks
It was stated that core inflation has only been able to return to its course prior to the energy price shock, and that households' inflation expectations have experienced another rise.
Indicating that foreign investors have not significantly increased their positions in Turkish bonds, it was assessed that an interest rate cut move in October could pose risks in terms of financial stability.