TRY: CBRT to hike its LLW rate by 50 bps - TDS

Analysts at TDS provide a sneak peak at what to expect from today’s Central Bank of the Republic of Turkey (CBRT) monetary policy decision.

Key Quotes:

“We expect the CBRT to hike its Late Liquidity Window (LLW) rate by 50bps to 13.25%, leaving all the other policy rates unchanged. This is in line with the Bloomberg consensus expectation, but the range of forecasts is wide, with some forecasters expecting no change in the LLW rate while some expect as much as 100bps hike.

Since the March MPC meeting the fall in headline inflation pretty much stalled and the Turkish lira has weakened by about 7% against the US dollar. Brent crude is up almost 17% in US dollar terms. Furthermore, ahead of the 24 June elections, the CBRT will want to stabilize the lira. This argues for hiking sooner rather than later and argues for giving the market pretty much what it expects, i.e. a 50bps hike in the LLW rate.”