Economists predict no change as all eyes on CBRT’s rate decision

The Central Bank of the Republic of Türkiye’s (CBRT) is set to announce its May interest rate decision on Thursday. In a surprising move in March, the bank raised the interest rate by 500 basis points to 50%.

As the decision for this month approaches, economists are widely forecasting that there will be no change in the interest rate.

No Change last month

In April, the central bank kept the interest rate unchanged. Economists predict that the rate will remain steady this month as well. Here are the expectations from the Central Bank’s Monetary Policy Committee (MPC) meeting according to economists.

Central bank survey

Participants’ expectation for the overnight interest rate in the BIST Repo and Reverse Repo Market at the end of the current month was 51.51%, slightly up from 51.43% in the previous survey period.

The 1-week repo auction rate expectation remains at 50.00%, unchanged from the previous period.

Reuters, Bloomberg surveys

All 16 economists participating in the Reuters survey predict that the policy rate will be kept unchanged this month. Similarly, all 26 institutions in the Bloomberg survey expect the rate to remain at 50%.

This survey period also included 22 institutions that shared their interest rate predictions for the end of 2024. According to the market’s May forecast, the policy rate by the end of 2024 is expected to be 47.5%. The highest forecast for the end of 2024 is 50%, while the lowest is 40%.

Foreks survey

In the Foreks survey, the median expectation for the May meeting is that the interest rate will be held at 50.00%. All 18 economists who participated in the survey expect the rate to remain unchanged.

Anadolu survey

The market expectation survey conducted by Anadolu Agency (AA) Finans for the MPC meeting on April 25th included 15 economists. The median expectation among these economists is that the interest rate will remain at 50%.