S&P Global Market Intelligence's Expectation for CBRT September Meeting
The international credit rating and research institution predicts that the Central Bank of the Republic of Turkey will not make any interest rate changes at its upcoming monetary policy meeting.
S&P Global Market Intelligence announced that it does not expect the Central Bank of the Republic of Turkey to make any interest rate cut moves at its September meeting this week.
No Expectation for an Interest Rate Cut
S&P Global Market Intelligence stated that the probability of the Central Bank of the Republic of Turkey implementing a new interest rate cut at its September meeting is low.
The institution emphasized that the bank's recent resumption of funding via the policy rate played a significant role in this expectation.
Funding Channel and Policy Rate
The CBRT had funded the system through the costly overnight lending window at the 40 percent level for approximately six months.
With the resumption of weekly repo auctions in late August, the effective funding rate was pulled down to the 37 percent policy rate level.
Inflation Forecasts and Global Risks
Andrew Birch stated that tensions between the US and Iran create pressure on global energy prices and that this situation will affect the inflation path.
It was argued that under current conditions, the CBRT's maintained year-end inflation forecast of 28 percent remains overly optimistic.