Poll: Türkiye will fix interest rates next week at 45%

An opinion poll showed that the Turkish Central Bank is expected to hold interest rates at 45 percent next week after raising them by 250 basis points last month, marking the end of a sharp monetary tightening cycle.

According to Reuters, the Monetary Policy Committee meeting on February 22 comes after the appointment of Fateh Kara Khan as head of the Central Bank on February 3, following the resignation of Hafiza Ghaya Arkan, who attributed her decision to her need to protect her family from what she called a media smear campaign.

All 11 economists agreed that the central bank will stabilize interest rates this month.

After the latest interest rate hike, the central bank said it had achieved the policy setting necessary to reduce inflation and that it would maintain this price level until there was a significant decline in the underlying trend in monthly inflation.

According to the average forecast of experts, interest rates are expected to be at 37.5% by the end of 2024. Only one institution out of the ten institutions whose opinion was polled expected interest rates to remain at 45% until the end of the year. Estimates ranged between 35 and 45%.

The inflation rate in Turkey jumped last month to an annual level of 64.9 percent after rising 6.7 percent on a monthly basis due to some large annual price increases at the beginning of the year and an increase in the minimum wage by 49 percent. Market traders’ expectations for inflation at the end of the year range between 40 and 45 percent.