How Are Markets Reacting After the Central Bank's Interest Rate Decision?
The Central Bank of the Republic of Turkey (CBRT) has decided to keep the policy interest rate at 50%. This decision was evaluated in line with the general expectations of the markets.
In October, a decline was observed in the main trend of inflation. The committee emphasized that the ongoing slowdown in domestic demand in the last quarter of the year continues to exert a disinflationary effect. Particularly, positive signals have become apparent in the area of service inflation. However, unprocessed food inflation continues to maintain a high level due to temporary supply conditions.
While pricing behavior and inflation expectations show improvement, they continue to pose risks in terms of the disinflation process. The firm stance of monetary policy aims to reduce the main trend of inflation and strengthen the disinflation process through balancing domestic demand, enhancing the real value of the Turkish lira, and improving inflation expectations. It was also emphasized that increased coordination in fiscal policy would make a significant contribution to this process.
According to the decision text, the tight monetary policy stance will continue until a clear and lasting decline is achieved in the main trend of monthly inflation. Additionally, the policy interest rate will be determined with the stringency required for the disinflation process, taking into account inflation realizations and expectations. The committee maintains its cautious stance against upward risks to inflation and states that it will effectively use monetary policy tools when necessary.
The Central Bank's decisions indicate that the uncertainty surrounding inflation is decreasing, and positive outcomes from the tight stance are expected, while also leaving the door open for a limited interest rate cut. The impact of this decision on the market has generally been assessed as "limited positive."
Current situation in domestic markets: Following the decision, the dollar/TL fluctuates between 34.45 and 34.54, with a partial daily increase of 0.1%, aiming to find balance at the 34.5 level. Euro/TL, after being pressured to 34.30 in recent hours, continues to drop by 0.2%. Grams of gold have slightly decreased in the last hour, pulling daily gains below 1%, trading around 2,960 TL. A downward trend is observed in the bond market.
BIST 100 accelerated its rise after the interest rate decision, gaining momentum towards 9,230 points, currently showing an increase of about 2.7%. Looking at the sector indices, banks have made the most significant contribution to today's rise, reaching a 4% increase. Among the main indices, the financial index leads with a rise of over 2.5%.
At this moment, there are no sectors in the negative zone on Borsa Istanbul, with rises continuing between 1% and 2%. Among the biggest gainers in BIST 100, ISCTR, AKBNK, YKBNK, and GARAN rank at the top.