A 50 bp rate cut this time. More could come if risk sentiment remains decent and the TRY does not weaken further.
The CBRT cut interest rates by 50 bp to 8.25%. It left the upper-end of the corridor unchanged at 12.00% and cut the lower-end of the corridor by 50 bp to 7.5%.
In the statement, the CBRT noted that it will keep a relatively tight monetary stance going forward and keep the yield curve relatively flat. That probably means that the CBRT will not cut rates faster than longer-term yields correct lower.
The CBRT also noted that inflation is coming down due to base effects from the sharp TRY weakening a year ago and its spill-over to consumer prices.
Looking ahead, we could see further modest rate cuts as long as risk sentiment remains decent and the TRY does not weaken further. Today’s decision should be market neutral.
Nordea