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The Bank’s Monetary Policy Committee (MPC) is scheduled to meet on Sept. 10 to decide on the policy rate.
According to Zeynel Balcı, research director at Meksa Yatırım, the prevailing market expectation is that the central bank will leave its policy rate unchanged at 37 percent on Sept. 10, while year-end interest rate expectations stand at 35 percent.
However, Balcı said a rate-cut surprise could not be ruled out in light of the resumption of weekly repo auctions and the credit packages announced for tradesmen and manufacturers, which he said could be viewed within the framework of an easing of monetary tightening policies.
According to Balcı, a possible rate cut would likely be perceived positively by Borsa Istanbul, particularly by bank stocks, as the banking sector is among the most interest rate-sensitive segments of the market.
“If the rate is left unchanged on Sept. 10, expectations will likely shift to the Oct. 22 meeting. This could have a short-term negative impact on the stock market,” Balci said.
The central bank is scheduled to release July balance of payments data on Sept. 11, while the Turkish Statistical Institute (TÜİK) will publish July industrial production figures on Sept. 10.
