Turkey | The CBRT delivered 200 bps rate cut

Summary

The Central Bank of Turkey (CBRT) decreased the policy rate by 200 bps to 12% from 14%, slightly higher than market expectation of 150 bps. Global Central Banks Dovishness remain supportive but we think that complacency should be ruled out and the CBRT should be ready to act in any direction if the situation change.

Key points

• Key points:
• CBRT continued its easing cycle (1200bps in total since July 2019).
• Normalization in food prices and easing in core inflation supported the disinflation path.
• Expected acceleration in economic activity, high inflation expectations, global and geopolitical uncertainties could pose upside risks on inflation outlook.
• We think that the CBRT should remain cautious and monitor closely inflation trends before continuing the easing cycle.

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