Despite inflation, no change is expected in the CBRT’s interest rate

All 15 economists surveyed by Reuters are of the opinion that interest rates will be kept constant at the Monetary Policy Committee (MPC) meeting in May.

2 out of 8 participants who gave forecasts for the end of the year predict that the CBRT will have to increase interest rates before the end of the year. One of the economists surveyed predicted that the policy rate would rise to 15% at the end of the year, while another participant predicted that it would be increased to 20%.


Economists’ expectations show that the peak of inflation, which has reached its highest level in 20 years, has not yet been seen and the rise may continue for a few more months, but most of the participants in the survey maintain the expectation that there will be no interest rate response due to the low interest determination within the framework of President Tayyip Erdoğan’s economic program that prioritizes production and exports.

At the end of last year, the CBRT gradually reduced the policy rate by 500 basis points to 14%, in line with the demands of Erdoğan, who argued that the interest rate causes inflation.

While the loosening cycle caused the exchange rate crisis and indirectly led to a sharp rise in inflation last year, the rising global energy costs after Russia’s invasion of Ukraine in February further fueled price increases.


Despite the rise in inflation, the CBRT did not change the policy rate in its last four meetings. The bank did not give any signals that it might change the interest rate later.

Some economists, on the other hand, choose not to participate in the surveys in recent months due to the unpredictability of the CBRT’s decisions.

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