Turkey | The CBRT easing cycle continues

Resumen

The Central Bank reduced the policy rate by 250 bps to 14% from 16.50%, much higher than market expectation (100bps). We think that the CBRT should start to increase caution in the magnitude of the policy rate cuts as global uncertainty remains well alive and the CBRT should be ready to react at any moment if needed.

Puntos clave

• Puntos clave:
• The CBRT continues easing cycle with another bold action of 250 bps rate cut in October meeting.
• The CBRT has justified its decision as it acknowledged that year-end inflation will be notably lower than inflation projection of 13.9% in July Inflation Report.
• The CBRT should preserve prudent stance to reinforce credibility in order to cope with the actual high uncertainty in the Global Financial Markets.

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