Turkey: CBRT cuts deep and promises more – TD Securities
|Analysts at TD Securities note that the CBRT's MPC has today cut interest rates by 325bps.
Key Quotes
“The cut was widely unticipated by us and the market, though the magnitude was difficult to forecast. We had anticipated a 400bps cut in the repo rate, on the back of anticipated sharp drop in inflation and political pressure for lower rates.”
“While it is difficult to produce an accurate measure of what the market implies at any time, our model was suggesting yesterday that the market was expecting around 300bps of easing, slightly more than the Bloomberg consensus of -275bps.”
“The market, however, may have well been priced for more, or have adjusted for further easing between yesterday and today, as the positive TRY reaction seems to suggest. In fact, USDTRY dropped immediately after the announcement, empirically confirming that the market had expected deeper cuts, as we did.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.