Turkish Central Bank set to make decision on interest rate

By Aysu Bicer

ANKARA (AA) - The Turkish Central Bank on Thursday is set to announce its decision on the interest rate for the first time this year, with analysts expecting no change in the key policy rate.

All economists surveyed by Anadolu Agency predicted that the policy rate will be kept constant at 14%.

Foreign financial institutions also expect the bank to keep interest rates stable.

Societe Generale expects no change in the interest rate, while Unicredit forecasts the bank will avoid a decision that will trigger the depreciation of the Turkish lira, keeping the policy rate at 14%.

Bank of America also expects the bank to keep the policy rate constant until the end of the first quarter.

Earlier, Treasury and Finance Minister Nureddin Nebati said inflation would reach its peak in January, but that there would be a decrease as of May due to developments in the world and decline in food and energy prices.

Turkiye posted a 36% annual hike in consumer prices in 2021, the highest in 19 years.

Nabati also voiced support for the Central Bank's decision to monitor the effect of the easing in the first quarter.

"I don't know how the Central Bank will take a decision. In my opinion, we should see January, February and March," he said.

The volatility is high in global markets due to inflation concerns, faster tightening expectations in monetary policies, rise in bond interest rates, and increasing geopolitical risks.

While expectations that central banks will tighten their monetary policies more rapidly continue to negatively affect investor risk perception, the increasing tension between Russia on one side and the US and NATO on the other over Ukraine is also at the top of the global agenda.