A Well-Handled Decision: Policy rate os now 15 % …
I know that not all of you are happy with the CBRT’s rate decision but I, personally, thought that they handled the situation quite well. First of all, those who have been hoping for a drastic rate increase in one fell swoop must be completely unaware of the reality, especially of the borrowing costs. If they are aware of it, they must have other things on their minds.
Now that the elections are over, it would be unethical to mislead the elected. I just hope my colleagues will one day realise that not all the same old solution methods apply to every problematic situation.
The key words in the CBRT’s press statement was the “tight monetary policy”. The rest of the statement, however, is like the announcement of the obvious. Just prior to the holiday, the Central Bank handled the situation as sensibly as possible.
Earlier in the week I said: “According to some, the Central Bank will push rates up to 24%. I do not know exactly how they came up with this level, but I do not think that an increase almost three times higher than the current level would be possible. Others say that the CBRT will increase interest rates to 20%, without any gradual steps, which also means a hike of more than 1000 bps and I doubt that it could be possible neither.” Based on what the sources close to Ankara say, “A policy rate between 13.5% and 18% looks like a likely possibility. Any rate higher than this seems undarable”.
All of this made me think of Mansur Ark’s song “Didn’t I tell you?..”
I wish everyone a very happy feast…