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Bloomberg HT / Zeynep Bayar Editor
Central Bank of the Republic of Turkey (CBRT) the one-week repurchase rate remained stable at the October meeting at the 10:25 percent level. The CBRT increased the interest on the late liquidity window (GLP) from 13.25 percent to 14.75 percent. The Central Bank raised the policy rate by 200 bp at its meeting last month.
In the CBRT press release on interest rates, it was noted that the recovery in economic activity continued, while the trend towards normalization of commercial and retail loans became more evident.
Boğaziçi University Faculty Member Prof. Dr. Burak Saltoğlu said: “Due to the conditions we are in, it was possible to declare a more reasonable rate due to both exchange rate pressure and inflation.” He said. Saltoğlu claimed that keeping the rate constant at a point where no one expected an increase in interest rates and vice versa, in a place that no one expected at the previous MPC, caused a communication problem.
Sharing his expectations on loan rates, Saltoğlu said that the record increase in home sales is the return on loan rates that were lowered early and that some increase in loan rates could be seen in the next period.
“With this decision, we are reading the signal that the interest rate corridor is expanding”
Commenting on the decision of the Central Bank to keep the interest rate constant, the Deputy Economist Director of Garanti BBVA, Seda Güler Mert, guest of Bloomberg HT, said: “In the text of the CBRT decision, we see that the difference between the Late liquidity window has increased from 150 basis points to 300 basis points along with the overnight loan rate. . With this decision, we see the sign that the interest rate corridor is expanding, “he said.
“I think updating the interest rate broker rather than updating the policy rate directly is a point of communication problem.” Seda Güler Mert said the text of the decision also included a statement that the risks were limited. “The inflation figures for September were a surprise to us.” Mert said that, however, the pass-through of the exchange rate is still limited to prices and risks continue to rise.
“The epidemic and the US presidential elections are the two most important uncertainties affecting the interest rate decision”
Another Bloomberg HT guest is the Director of Business Administration at TED University. Dr. İbrahim Ünalmış became. Ünalmış said that, with the decision made by the Central Bank, it gave us the message that it kept the interest rate constant due to the uncertainties we experienced and that there are policy options to increase the interest rate when necessary.
Emphasizing that the effect of the second wave on the epidemic and the US presidential elections are the two most important uncertainties affecting the interest rate decision, Ünalmış asserted that the fact that the Central Bank does not show a Tough stance on the decision text caused a harsh reaction in the markets.
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