Economy in Turkey: US Bank says interest rates will be increased by 500 basis points

US-based investment bank Morgan Stanley stated that it expected the Central Bank (CB) to raise interest rates by 500 basis points in October.

Morgan Stanley published a report on Turkey. According to Bloomberg HT, the bank is expecting a 500 basis point interest rate hike from the CB in October.

The bank’s report also mentioned that it was expected for the interest rate to be at 40% in the second quarter of 2024: “Considering the high inflation trend and the policy preference to reduce dependency on regulations, we anticipate another 250 basis point increase in November, raising it to 37.5%. Local elections may slow down the tightening process and signal upward risks on the inflation outlook, but we expect further tightening after March and estimate the final interest rate to be 40% in the second quarter of 2024.”

The current policy rate is 30%. The next Monetary Policy Committee (MPC) meeting will be held on October 26th.