Agencies
The Turkish central bank is set to convene for its first monetary policy committee (MPC) meeting this year on Thursday as markets look for its next move following the first rate cut in nearly two years earlier in December.
Several polls and independent economists expect the Central Bank of the Republic of Turkey) to likely opt for another 250 basis points (bps) cut this week after the bank slashed rates to 47.5% from 50% at the end of last month.
That marked the first easing since February 2023 amid a long tightening cycle between mid-2023 and March last year.
The economists polled by Anadolu Agency (AA) expect the CBRT to continue with the cuts, foreseeing a 250 bps reduction this week. All 17 economists in a poll shared the same expectation.
Similarly, all 25 institutions that participated in the survey by private broadcaster Bloomberg HT shared on Friday unanimously expect a 250 basis point interest rate cut from the CBRT this week.Turkey’s annual inflation eased to 44.38% in December, closely in line with CBRT’s final year-end projection, official data showed earlier this month. The inflation dropped from around 75.5% in May last year.
The median of economists’ polled by AA for the 2025 year-end policy rate was 30%. This correlated with the expectations in the poll of Bloomberg HT, where economists also pointed to a policy rate level of 30%. In the previous survey, the estimate was at 31%.
The highest expectation in participants’ interest rate estimates for the end of 2025 was 35%, and the lowest was 25%, it said.
The MPC meeting will take place against the backdrop of improving expectations related to the inflation outlook. A recent survey of market participants for January by CBRT showed that the 12-month ahead inflation expectations declined to 25.38% from 27.07%.
"It is very important that the improvement in expectations continues for rigidities to decrease,” Treasury and Finance Minister Mehmet Şimşek said in a post on X on Friday, commenting on the results of the CBRT survey.