Fitch Evaluated the CBRT's Interest Rate Increase

Fitch evaluated the CBRT's interest rate increase. Credit rating agency Fitch said this increase reinforces the orthodox approach.

International rating agency Fitch stated that the decision reinforced the orthodox approach in the assessment of the Central Bank of the Republic of Turkey (CBRT) regarding the rate hike above expectations. In its assessment, the institution stated that the economic reform package is in line with the improving price stability, but that the rebuilding of credibility will take time and the reconstruction depends on the implementation risks and the continuation of the tight monetary policy.

Institution used the following expressions in the evaluation:

"In Turkey, the reform package could complement the recent developments in transparency and predictability in monetary policy. Commitment to fiscal discipline is still the key note strength. There is still no detail on how to solve structural problems such as low savings rate." In the Global Economic Outlook Report published this week, Fitch raised Turkey's 2021 growth forecast from 5.7 percent to 6.7 percent and predicted that the economy will slow down in the second half as a result of tight policies.   This article has contributions Bloomberg HT.