Morgan Stanley Expects Rate Increase From CBRT

Morgan Stanley Expects Rate Increase From CBRT Morgan Stanley expects an interest rate increase from the CBRT. The estimate of the institution seems limited compared to other foreign institutions. Morgan Stanley is expecting the interest rate increase of 150 basis points at the Central Bank of Turkey (CBRT) monetary policy meeting to be held on 19 November. Morgan Stanley economists Alina Slyusarchuk, Andrea Masia and Georgi Deyanov's expectations for a rate increase were more limited alongside other foreign institutions. According to Morgan Stanley economists, the CBRT may decide on a larger rate increease to reinforce its goal of containing inflationary pressures. However, on the other hand, factors driving inflation such as Turkish Lira loan growth and domestic demand increase are normalized and this situation requires non-aggressive action. In the previous period, institutions such as Barclays, Goldman Sachs and Deutsche Bank submitted reports, including an interest rate expectation of 475 basis points from the CBRT on November 19. Last weekend, Naci Ağbal was appointed as the head of the CBRT, and when the Minister of Treasury and Finance Berat Albayrak resigned, he was replaced by Lütfi Elvan. Following these developments, President Erdoğan emphasized the 'new era in the economy' in his speeches and exchange rates and gold fell rapidly. Stating that they aimed to reduce inflation to a single digit, Erdogan stated that if necessary, a painful prescription could be applied. After these signals, TL assets gained value and many foreign institutions turned to the TL.       Source: Bloomberg HT