Prof. Dr. Hakan Kara's Assessment on Fund Crisis and Economic Impact
Bilkent University Faculty Member Prof. Dr. Hakan Kara stated that the ongoing fund crisis will slow down economic growth and strengthen the possibility of an interest rate cut by the Central Bank.
Bilkent University faculty member and former Central Bank Chief Economist Prof. Dr. Hakan Kara evaluated the potential economic reflections of the fund crisis in the markets, stating that growth will slow down and expectations for interest rate cuts have increased.
Macroeconomic Reflections of the Fund Crisis
Bilkent University faculty member and former Central Bank Chief Economist Prof. Dr. Hakan Kara made macroeconomic evaluations regarding the recent fund crisis. Stating that fund market professionals have a better grasp of the issue, Kara addressed the economic dimension of the event as a macroeconomist.
It was stated that this development will further slow down economic activity and the overall growth rate through the asset and liquidity effect.
Interest Rate Cut and Inflation Expectations
It was projected that inflationary pressures might decrease to some extent with the economic slowdown. This situation was expressed as increasing the possibility of an interest rate cut at the October meeting of the central bank.
It was emphasized that under normal conditions, such negative shocks could bring a 150-200 basis point cut, but a 100 basis point cut would be preferred due to the risk of shifting to foreign currency and concerns over losing reserves.