The Central Bank of Turkey is expected to keep its rates on hold at the monetary policy committee meeting scheduled for April 24 despite pressure from the government.
A CNBC-e poll of 18 economists showed that the Bank is expected to keep its policy rate (one-week repo) unchanged at 10%. Two economists expect a cut in the overnight lending rate (currently at 12%) between 50bp and 25bp. Three of the economists polled by CNBC-e are looking for a cut in TRY reserve requirement.
Earlier this month, PM Recep Tayyip Erdogan called for a rate cut, arguing that the AKP’s strong showing in the March 30 local elections boosted markets and lower interest rates would encourage investments. The PM said that the bank should review its interest rates at an emergency meeting. In response to Erdogan’s remarks, the central bank governor Erdem Basci said that no large rate cut should be expected. Interest rates should be lowered gradually, and an interim monetary policy committee meeting is not necessary, Basci added.
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