Will CBRT Raise The Interest Rates? What Are The Expectations Of The Markets?

Will CBRT Raise The Interest Rates? What Are The Expectations Of The Markets? Most important part of the agenda in the new week was the meeting of the Central Bank of Turkey's Monetary Policy Committee. So will the CBRT raise the interest rates? What are the expectations of the markets? Here are the details … The Monetary Policy Committee of the Central Bank of Turkey at this week's meeting was the focus of the markets. Contrary to the estimations in September, the CBRT increased the interest rate by 200 bps and increased the funding rate in the markets to 12.26 percent in the ongoing process. This interest rate was around 7 percent in July. In this context, it is predicted that the Central Bank will increase interest rates in the range of 150-200 bp at this month's meeting. Despite the unexpected rate hike in September, value gains on the currency side continued. Accordingly, the Turkish Lira diverged negatively from the currencies of the developing countries and saw the lowest levels in its history. Increasing geopolitical risks were the most important factor in this sharp decline. In October, with the CBRT's stronger use of additional instruments, besides the 200bp interest rate increase, it points to a recovery in the markets. Foreign investors, who have been disingaging regularly since the beginning of 2020, increased to a good rate in the previous week. On the other hand, it seems that the increase in interest rates caused some appeal. The continuity of this situation is not only dependent on the interest rate hike, but both the geopolitical tension should decrease and the indicators should be good. Inflation is expected to increase from October, but how it reflects on the CPI after the PPI is among the important issues. It is almost certain that the year-end target will be double digits, while the movement above 12 percent is quite risky. President Erdoğan announced that 85 billion cubic meters of natural gas reserves were discovered at the weekend. The goal in this regard is to prepare the reserves found for use until 2023. Having made a leap forward with the new reserve announcement last week, Petkim Petrokimya Holding A.Ş. completed the week at 4.630 points level. Today, it is traded at 4,540 points with a 2 percent depreciation. It is normal to have profit sales with the pricing of expectation in the stock. BIST 100 in Borsa Istanbul, on the other hand, continues its gains led by BIST Banks, while interest rate expectations continue to affect the rise on the banking side. The index climbed to 1,200 points today, hitting the zen high after July. However, above 1.118 points, 1.205 is the closest resistance. Looking at the exchange rates, in addition to domestic expectations, the USD / TRY fell below the level of 7.90 as the dollar eased with the developments regarding the stimulus package negotiations. Above the 7.87 level is seen as risky. For the first relief to be experienced after a long time, the day must be completed below this level. With the pricing of the interest rate hike, 7.64 will be followed as the first important support in possible decreases to be seen later in the week.