According to analysts at TD Securities, there is little doubt that the CBRT will cut rates today, but there is a great deal of uncertainty about how large the cut will be.
Key Quotes
“The recent surprise dismissal by President Erdogan of Cetinkaya as Governor argues for the cut being bigger than would have otherwise been the case. However, the new Governor, Uysal, might not want to push his luck by going for a very large cut straightaway.”
“The Bloomberg consensus is for a 250bps cut in the benchmark one-week repo rate, with forecasts ranging from 50-800bps. We expect a 350bps cut in the repo rate with the WACF falling by that amount.”
“We also expect the corridor to be adjusted symmetrically lower, with a slightly higher margin of flexibility around the level of the LLW rate. We also expect further quantitative easing through the loosening of RRRs and ROCs.”
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