Expectations of a sizable hike in Turkey’s benchmark rate in this month’s policy meeting are gaining traction, fueled by the appointment of investor-friendly names in President Recep Tayyip Erdogan’s new economy team.
(Bloomberg) — Expectations of a sizable hike in Turkey’s benchmark rate in this month’s policy meeting are gaining traction, fueled by the appointment of investor-friendly names in President Recep Tayyip Erdogan’s new economy team.
The central bank’s Monetary Policy Committee will raise the one-week repo rate to 17% from 8.5% on June 22, according to the median estimate in the central bank’s monthly survey published on Friday. That’s lower than the median estimate of 20% in a Bloomberg survey of 10 economists.
Under pressure from Erdogan, the central bank has refrained from raising rates since March 2021. But after elections last month, in which the president got reelected, investors raised bets of a return to gradual orthodoxy with recent appointments of the Wall Street duo Mehmet Simsek and Hafize Gaye Erkan as finance minister and central bank governor, respectively.
Erdogan Backs New Economic Team But Won’t Change Rates View
President Erdogan signaled he would accept flexibility in monetary policy earlier this week, saying he has “accepted” measures proposed by Simsek and Erkan.
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