What happened in economy last week?
In the week left behind, the Central Bank of the Republic of Turkey’s (CBRT) new inflation forecast and appointments for 2023 came to the fore in domestic markets. On the other hand, the most important agenda in global markets was the interest rate decisions of central banks.
The US Central Bank (Fed) which had temporarily stopped policy rate increases last increased its policy rate by 25 basis points at its July meeting, within expectations. The interest rates were thus increased 11 times since 2022 and reached a 22-year high. The text of the decision left the door open to further interest rate increases and stated that the measure of additional tightening would be evaluated in order to reduce inflation.
THE ECB CONTINUED TO TIGHTEN
The European Central Bank (ECB) continued the tightening process with the decision of a new interest rate increase. The 25 basis point increase has been the 9th increase decision since July, last year. AMB President Christine Lagarde, who held a press conference after the decision, expressed that they were open-minded about the decisions to be taken for September and beyond.
SHARP INCREASE IN THE CBRT’S INFLATION FORECAST
Hafize Gaye Erkan, the new chairperson of the Central Bank of the Republic of Turkey (CBRT), announced that the bank had made a sharp upward revision in its inflation forecasts at the end of the year in his first inflation report presentation.
Erkan announced that the CPI forecast for the end of 2023, which was projected as 22.3 percent in the previous Inflation Report, had been increased to 58 percent. Erkan said that the positive impact of monetary policy and quantitative tightening measures on the main inflation trend would begin to be seen in the second quarter of 2024.
VICE PRESIDENTS HAVE CHANGED AT THE CENTRAL BANK
With the decision published in the Official Gazette, the positions of three vice presidents at the Central Bank of the Republic of Turkey were terminated. Cevdet Akçay, Fatih Karahan and Hatice Karahan were appointed as Vice Presidents in place of the dismissed names.
