Turkey's CB expected to cut rate 50 bps
Güncelleme Tarihi:
Turkey’s central bank is widely expected Thursday to cut borrowing interest rates by 50 basis points to 15.75 percent , while a higher cut is forecasted for lending interest rates as it looks to revive the increasingly worsening Turkish economy.
Turkish gross domestic product (GDP) grew 0.5 percent year-on-year in the third quarter, as the global financial crisis began to bite into economic activity, while unemployment data that rose to 10.3 percent in the August-October from 9.3 percent a year earlier, also reinforced the worsening economic picture.
According to a poll conducted by CNBC-e, there is agreement among the 17 economists and 10 treasury analysts surveyed over expectations that the central bank announce a 50 bps rate cut.
Expectations were also high that the bank would make larger cuts to lending rates than borrowing rates, after a recent announcement that it could narrow the range between lending and borrowing rates.
In its latest Monetary Policy Committee meeting in November the central bank cut its borrowing rate by 50 bps to 16.25, while it lowered the lending rate 100 bps to 18.75, a move aimed at easing the credit squeeze.
The yield on the benchmark June 23, 2010 bond fell further to 17.75, a fresh nine-month low, after reaching 17.86 percent on Wednesday, on expectations of a rate cut announcement.
The lira also gained against the U.S. dollar and traded at 1.5310, up from Wednesday's close of 1.543 on the interbank market, extending gains made since the Federal Reserve cut