Investors Watch Central Bank for Interest Rate Surprises
The Central Bank’s Interest Rate Decision on the Radar of Domestic Markets
The eyes of domestic markets are set on the Central Bank’s interest rate decision, which is set to be announced today. Currently, the bank maintains the policy rate at 50 percent, but the question remains: will there be any changes following the latest inflation figures?
Although annual inflation dropped below 50 percent in September, monthly inflation remained high at 2.97 percent. Will the Central Bank adjust its interest rates accordingly? What impact will this have on the stock market, dollar, and gold prices?
Economist Tuğba Ekin shared insights on the matter, suggesting that as long as the Central Bank keeps interest rates stable, private banks may not be flexible in adjusting their rates. The current 50 percent policy rate is expected to continue influencing the market for some time.
As expectations for a possible interest rate cut grow, it is essential to note that any decision by the Central Bank must be based on sustainable declines in inflation. While market expectations play a significant role, the Central Bank is likely to start interest rate cuts only if inflation continues to decrease consistently.
The potential for interest rate reductions or dovish messages in text could impact the market, leading to pricing adjustments and strengthening expectations for future rate cuts. This could have a positive effect on the stock market, with implications for the Dollar/TL exchange rate as well.
The decline in the stock exchange index can be attributed to various factors, including falling balance sheets, cash shortages in companies, geopolitical risks, and disruptions in the supply chain. Companies are facing challenges due to uncertainties in production costs and long payment terms.
Technical analysis suggests strong support levels in the BIST 100 Index, with key thresholds to watch for potential price movements. Gold prices are supported by geopolitical risks, while the dollar exchange rate may see fluctuations depending on market dynamics.
The possibility of the dollar falling below 34 TL hinges on various factors, including the country’s budget balance and the Central Bank’s monetary policy decisions. Balancing these factors will be crucial in determining the future direction of the exchange rate.
Overall, the upcoming Central Bank announcement is eagerly awaited by domestic markets, with potential implications for various sectors. As the economic landscape continues to evolve, market participants will closely monitor developments to make informed decisions.
