Morgan Stanley Envises: Turkish Central Bank May Cut The Interest Rates
Morgan Stanley, one of the world’s largest banks, forecasted the Central Bank of the Republic of Turkey’s (CBRT) interest rate decision in February. Morgan Stanley economists predict that the Central Bank will decrease interest rates by 100 basis points at its February 23 Monetary Policy Committee meeting.
“We expect the policy rate to be cut by 100 basis points to 8% next week,” Morgan Stanley economists Hande Küçük and Alina Slyusarchuk said in a February 17 research. “We believe it raises the prospect of a greater rate drop by one basis point or an extra rate decrease at the March meeting,” they added.
Morgan Stanley Suggests that the CBRT is Going to Cut the Rates by 100 Points
Analysis regarding the economic policies suggests that the “substantially” stronger fiscal stimulus and looser monetary policy are likely to be inflationary, but no change in the macro policy framework is predicted as Turkey approaches the elections. It could destabilize various social and economic aspects of Turkey beforehand and could potentially change the outcome of the elections with its effects. Analysts also concluded in the research that Morgan Stanley’s 2023 year-end inflation projection of 48 percent is subject to considerable upside risks.
Economists stated that they calculated the loss of housing stock at the level of 24 billion dollars (2.9 percent of GDP) and expected this to be the largest factor in the total economic cost, stating that the macroeconomic effects of the earthquake disaster and the financing needs in the reconstruction process are manageable. A JPMorgan study released earlier this week that the CBRT is going to cut by 100 basis points in February.