Turkey Central Bank Seen Holding Rate at 37% as Oil Jumps 17.35%
Updated
Updated · Türkiye Today · Jul 20
Turkey Central Bank Seen Holding Rate at 37% as Oil Jumps 17.35%
3 articles · Updated · Türkiye Today · Jul 20
Summary
July 23's policy meeting is expected to deliver no change, with a Matriks Haber survey of 33 institutions pointing to a hold at 37% and effective funding staying near 40%.
Brent's rise to $88.27 from $75.22 in a week — after Strait of Hormuz shipping slowed and wider Middle East risks grew — is worsening Turkey's inflation and external-balance outlook.
Domestic pressure is already building: gasoline prices are up 5.4% and diesel 13.2% in July, while the two-year benchmark bond yield has climbed to 41.5%.
Markets have adjusted to a tighter-for-longer path, lifting the year-end policy-rate forecast to 35%; Bank of America cut Turkish banks to Neutral, and the banking index is down 16.3% from its four-week peak.
Turkey's May current account deficit was $1.5 billion, with the rolling annual gap at $37.3 billion, leaving oil prices and July inflation as the main near-term drivers for Borsa Istanbul.