Interest rate increase in Türkiye sparks domestic, international concerns

The unexpected decision of the central bank of Türkiye to increase interest rates by 500 basis points has caused significant reverberations both domestically and internationally

The Central Bank of the Republic of Türkiye’s (CBRT) unexpected decision to increase interest rates by 500 basis points had significant repercussions nationally and internationally. The decision was considered an essential development in the markets and economic circles.

BBVA Research President Alvaro Ortiz appreciated the surprise move and congratulated the CBRT. In a statement on his social media account, Ortiz emphasized that this increase prevented the need for a larger increase later and the importance of timely tightening. He also stated that the central bank had regained its independence.

Famous economist Timothy Ash also stated that this decision shows the bank’s independence and determination to fight inflation. Ash pointed out that the interest rate increase occurred despite the elections.

Generali Investments’ emerging markets strategist, Guillaume Tresca, emphasized that this has increased the CBRT’s independence. According to Bloomberg’s survey, Deutsche Bank and Goldman Sachs were the only ones to predict this outcome, while other economists had forecast interest rates to remain constant.

Peter Kisler, emerging markets portfolio manager at Trium Capital in London, described this decision as a “pleasant surprise.” It is expected to positively impact the markets and contribute to Türkiye’s economic stability.

Source: Newsroom

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