Barclays Plc economists differentiated from other major banks by projecting a more limited interest rate hike at the upcoming Monetary Policy Committee meeting of the Central Bank of the Republic of Turkey (CBRT) next week.
While JPMorgan Chase & Co. and Morgan Stanley expect a 500 basis point interest rate hike at the meeting on September 21st, Barclays predicted a 250 basis point move.
Barclays analysts mentioned that while they do not rule out a sharper move, they expect ‘gradual increases’ following the expectation-surpassing interest rate hike in August.
The analysts stated, ‘The CBRT is likely to prefer a more gradual tightening cycle to limit its impact on banks, companies, and households. Additionally, macroprudential tightening is continuing at full speed, and the central bank probably believes this reduces the need for larger increases.’
Barclays continues to forecast that the policy rate in Turkey will be 35% by the end of this year and 40% by the end of 2024.