CBRT seen lowering its O/N Lending Rate today – TDS

Annette Beacher, Macro Strategist at TD Securities, expects the Turkish central bank to cut its O/N Lending Rate by 25 bp at today’s meeting.

Key Quotes

“CBRT will announce its rate decision today. We see no reason why their easing programme should be interrupted”.

“However, while we continue to expect the CBRT to ease policy one way or another, by no means do we think this course of action is justified by the macroeconomic backdrop or financial risks that loom at the horizon”.

“TRY has so far not overreacted to Fitch’s change in outlook last Friday, which suggests that we should expect the MPC to cut the O/N Lending Rate by 25bps to 8.50%”.

“This process is likely to continue until symmetry in the corridor is restored at ±25bps around the repo (so when the lending rate is 100bps lower, with repo at 7.50%)”.