Today, the interest rate applied by the Central Bank to the market is as follows.
Weekly Repo Rate:
Debt Borrowing: - Debt Lending: 17.75
The main objective of the Central Bank is to achieve and maintain Price Stability. In this context, by examining the inflation rates:
Inflation rate:
2018 - 1: 10.35
2018 - 2: 10.26
2018 - 3: 10.23
2018 - 4: 10.85
2018 - 5: 12.15
2018 - 6: 15.39
In recent terms, the significant rise in inflation increases the fragility of the Turkish Economy.
According to the calculations made, the 1 percent depreciation rate on the exchange rate indicates that inflation has increased by 15 basis points. In this context, considering the rise in exchange rates starting from April, this increase will increase even more in July and August due to exchange rate pass-through. Also at the same time, PPI's 23.71 coming in June will see the increase in producer prices affect consumer prices more. In this case, I think that inflation in July will be 16.2% and inflation in August will be around 17.1%. In this context, I estimate that at the end of the year, inflation will be around 13.5 - 14 per cent.
In addition to the significant deterioration in inflation outlook, indicative interest rate rise up 20.44. This situation will force to increase interest rates. The Central Bank will carry out interest rate increase of 175 basis points, indicating that it will continue its independence and fight inflation in a real sense. With the gradual decline to be provided by Inflation with the support of the fiscal policies to be implemented by the new economy management. In this regard interest rates in the CBRT will gradually decrease in the future period. Such a sharp increase in interest rates will curb growth in the first place, but again with gradual interest rate reductions along with a decrease in inflation will be provided to ensure the reduction of the interest burden on the investment environment in Turkey.
Without decreasing Inflation and current deficit, it is likely that the economy will be vulnerable to external shocks . In this context, it is of utmost importance that both the monetary policy and the fiscal policy are implemented in a coordinated manner.
Wishing to meet you in the next article
Stay safe.
Weekly Repo Rate:
Debt Borrowing: - Debt Lending: 17.75
The main objective of the Central Bank is to achieve and maintain Price Stability. In this context, by examining the inflation rates:
Inflation rate:
2018 - 1: 10.35
2018 - 2: 10.26
2018 - 3: 10.23
2018 - 4: 10.85
2018 - 5: 12.15
2018 - 6: 15.39
In recent terms, the significant rise in inflation increases the fragility of the Turkish Economy.
According to the calculations made, the 1 percent depreciation rate on the exchange rate indicates that inflation has increased by 15 basis points. In this context, considering the rise in exchange rates starting from April, this increase will increase even more in July and August due to exchange rate pass-through. Also at the same time, PPI's 23.71 coming in June will see the increase in producer prices affect consumer prices more. In this case, I think that inflation in July will be 16.2% and inflation in August will be around 17.1%. In this context, I estimate that at the end of the year, inflation will be around 13.5 - 14 per cent.
In addition to the significant deterioration in inflation outlook, indicative interest rate rise up 20.44. This situation will force to increase interest rates. The Central Bank will carry out interest rate increase of 175 basis points, indicating that it will continue its independence and fight inflation in a real sense. With the gradual decline to be provided by Inflation with the support of the fiscal policies to be implemented by the new economy management. In this regard interest rates in the CBRT will gradually decrease in the future period. Such a sharp increase in interest rates will curb growth in the first place, but again with gradual interest rate reductions along with a decrease in inflation will be provided to ensure the reduction of the interest burden on the investment environment in Turkey.
Without decreasing Inflation and current deficit, it is likely that the economy will be vulnerable to external shocks . In this context, it is of utmost importance that both the monetary policy and the fiscal policy are implemented in a coordinated manner.
Wishing to meet you in the next article
Stay safe.
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