Markets Do Not Expect An Increase To The Interest Rate From CBRT

The markets do not expect an increase to the interest rate from the CBRT. The meeting on April 15 will be Kavcıoğlu's first meeting.

The markets do not expect any change at the first meeting after the change in the Governorship of the Central Bank of the Republic of Turkey (CBRT). In the interest survey conducted by Bloomberg HT with the participation of 26 institutions, the median expectation was that the policy rate would be left unchanged at 19 percent. While only one institution expects an increase of 100 basis points in the survey, the expectation of 25 institutions is that the CBRT will not make any changes in this meeting. In the said survey, it was stated that the interest rate expectation for the end of 2021 will increase by 2 points. While the market's expectation was at 14 percent in the previous survey of Bloomberg HT, this expectation rose to 16 percent in the last survey. While the institution with the highest expectation for the end of the year expects the policy rate at 18 percent, the policy rate will be 14 percent at the end of the year, according to the institution that shares the lowest expectation.

Naci Ağbal Was Dismissed

Unexpected changes occurred after the CBRT meeting in March. With the Presidential decree, Naci Ağbal was removed from the governorship and Şahap Kavcıoğlu was appointed to replace him. In addition to the change in the Governorship, Elif Haykır Hobikoğlu was appointed to the Monetary Policy Committee. In an interview with Bloomberg, the new CBRT Governor Kavcıoğlu said, "I do not find the prejudiced approach that the rate will be reduced immediately regarding the MPC decision in April or the following months."     This article has contributions of Bloomberg HT.