Turkiye central bank governor Fatih Karahan. — Bloomberg
ISTANBUL: Turkiye’s central bank is expected to deliver its first interest rate cut in nearly two years, with major banks divided on the size of the reduction.
Policymakers led by governor Fatih Karahan will lower the benchmark rate of one week repo to 48.25% from 50%, according to the median estimate in a Bloomberg survey of analysts.
Predictions vary in the absence of clear guidance by the central bank.
JPMorgan Chase & Co and Deutsche Bank AG expect a 150-basis-point (bps) cut while Citigroup Inc and Bank of America Corp are penciling in a reduction of 250 bps.
Some officials have called for caution against what investors might perceive as aggressive moves, as the bank prepares to reverse its most aggressive tightening cycle in years.
Bloomberg Economics said, “Looking ahead, we expect the central bank to lower rates at nearly all of its monthly meetings next year, cutting the policy rate to 25% by end-2025.
“The easing of financial conditions will also feature looser macroprudential rules – we especially see the central bank focusing on this in the second half of the year.”
Still, some investors expect the bank might opt for a more cautious approach. — Bloomberg
