This is how the foreign press interpreted the CBRT’s interest rate decision

Today’s interest rate decision of the Central Bank (CBRT) also found coverage in the foreign press.

CBRT Monetary Policy Committee (PPK) announced the interest rate decision. The bank kept the policy rate constant at 50 percent. The general expectation in the market was that interest rates would be kept constant.

The news about the interest rate increase from leading foreign media organizations was as follows:

BLOOMBERG

The US financial agency Bloomberg published a news article titled “Turkey stopped interest rate increases before the inflation peak approaching 70 percent”, signed by Barış Balcı and Tuğçe Özsoy.

The news stated that the CBRT did not change the interest rates this month after its surprise decision last month and stated that “Policy makers have recently been providing more expensive funds to banks than the benchmark interest rate indicates.”

The news also stated, “The flexibility provided by a wider interest rate corridor has paved the way for the central bank to bypass the interest rate increase for the second time since it started its aggressive tightening campaign last June.”

Bloomberg economists Ziad Daoud and Selva Bahar Baziki said:

“CBRT left interest rates constant at the April meeting. We still expect borrowing costs to increase. However, this increase will occur not by increasing the policy rate, but by restricting access to loans and forcing banks seeking liquidity to pay a higher price. The Central Bank is likely to increase credit growth and tighten regulations.”

REUTERS

British news agency Reuters stated in its report, “CBRT kept the interest rates constant at 50 percent as expected, citing a major tightening in financial conditions since the last interest rate increase, and promised to tighten the policy further if necessary in the campaign to reduce inflation.”

The news reminded that interest rates were increased from 8.5 percent to 50 percent in an approximately one-year cycle, reversing President Tayyip Erdoğan’s ‘low interest and credit-supported growth’ policy, which caused a series of foreign exchange crises and increased inflation in recent years.

The news also stated, “The cost of living crisis, which has been going on for years for Turks, is expected to begin to ease in the second half of the year due to the monetary tightening cycle that started with a U-turn towards a more orthodox economic program in June last year.”

WALL STREET JOURNAL

A news article titled “Central Bank kept the benchmark interest rate constant” was published in the Wall Street Journal, signed by Ed Frankl.

The news stated that “Despite the continuing inflationary pressures, the CBRT signaled that the recent increase series has ended by not changing the benchmark interest rate.”

In the news, it was stated that the main trend of monthly inflation was higher than expected and domestic demand remained resilient, and expert opinion was also included.

“Turkey’s economy remains hot and inflation pressures are strong, indicating that interest rates will not be reduced anytime soon,” Capital Economics economist Nicholas Farr said in a note to clients.