Central Bank of Turkey hikes repo rate by 125 bps to 17.75 pct
The Central Bank of Turkey hiked its key interest rate today. The CBRT raised the repo rate by 125 basis points to 17.75 percent, as compared with consensus expectations of the central bank to keep the rates unchanged. T…
By FxWirePro Team
1 min read
The Central Bank of Turkey hiked its key interest rate today. The CBRT raised the repo rate by 125 basis points to 17.75 percent, as compared with consensus expectations of the central bank to keep the rates unchanged. Today’s move strengthens the view that the central bank has been given some flexibility to pursue its inflation target, noted Nordea Bank in a research report.
For now, the central bank’s moves are believed to be sufficient to turn the trend in USD/TRY and reinforce the Turkish lira slightly in days ahead. Risks continue to stay on the horizon through. The presidential election is near on the horizon, inflation might accelerate further because of lagged effects on the massive TRY weakening, and the USD exposure of Turkish non-financial firms would not go away anytime soon.
“Thus, we still expect lots of volatility going forward and the CBRT might need to do more”, added Nordea Bank.
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