The median expectation for the March meeting of the Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee (MPC) was that the interest rate would be kept at 45.00 percent.
Economists predicted that the interest rate will not be changed, considering that the CBRT will want to see the effects of the measures taken, March inflation and whether there is a normalization in the exchange rate after the election. It is also estimated that the dose of tightening discourse may increase in the decision text.
While 20 of the 24 economists participating in the Foreks News survey expressed the expectation that the interest rate will be left unchanged, 3 of them expect the interest rate to be raised to 250 basis points and 1 to 500 basis points.
In the survey, the median interest rate forecast of 11 economists who gave their opinions for the end of 2024 was 45.00 percent. The maximum expectation in year-end interest rate forecasts was 50.00 percent and the minimum expectation was 37.50 percent. In last month’s Foreks News survey, the median forecast was 38.75 percent, and the forecast range was realized in the band of 45.00 percent to 35.00 percent.
Economists expect both an interest rate hike and an interest rate cut in 2024
Of the 11 economists who answered the question “Do you expect an interest rate cut in 2024?”, 6 answered “yes” and 5 answered “no”. Answering the question “Do you expect an interest rate hike in 2024?”, 9 of 11 economists answered “yes” and 2 answered “no”.
Economists predict that the first interest rate decision will be in April and in the direction of an increase. 8 out of 10 economists stated that the first change will be in the direction of an increase, while 2 economists stated that the first change will be in the direction of a decrease. Regarding the timing of the first interest rate decision, 5 of the 10 economists participating in the survey predicted that it would be in April, 3 in March, 2 in October and 1 in the first quarter of 2025. In the Foreks News survey conducted last month, expectations were for a rate cut in September.
