The latest interest rate decision forecast came from Moody’s

Moody's

Credit rating agency Moody’s stated in its report dated June 20 that they expect the Central Bank of the Republic of Turkey (CBRT) to lower its policy interest rate to a level close to deposit rates. The institution emphasized that if the expected changes in economic policies in Turkey materialize, it would have a positive impact on the credit rating, and they expressed their expectation for the policy rate to be brought closer to deposit rates.

The report published by the credit rating agency stated, “The transition to an orthodox, rule-based, and predictable policy, if observed, would undoubtedly be positive for the credit rating.” Moody’s also mentioned the expectation for the policy rate to rapidly converge with TL deposit rates, which are currently around 25-30% depending on the maturity, and assessed that additional interest rate hikes would be necessary to effectively tighten monetary policy and emphasize the CBRT’s commitment to fighting inflation.

The institution also discussed the macroprudential measures implemented over the past year, stating that the majority of these measures, including those with the greatest impact on the profitability of the banking sector, are expected to be gradually lifted.

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