Rates To Be Cut Further

The Central Bank of the Republic of Turkey (CBRT) cut its benchmark overnight borrowing rate a further 50bps on June 16 to a new record low 8.75%. The decision to continue cutting by 50bps indicates that the monetary policy committee (MPC) remains focused on deteriorating domestic demand conditions and financial market instability as opposed to tentative signs of macroeconomic recovery. While this suggests that there are risks of further aggressive monetary easing, we are holding to our end-year overnight borrowing rate forecast of 8.50%.

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