The Impact of Central Bank Decisions on Gold, Dollar, Stock Market, and Deposits: A Comprehensive Analysis
The eyes and ears of the markets are eagerly awaiting the interest rate decision of the Central Bank, which is set to be announced at 14:00 today. Currently, the Central Bank’s policy interest rate stands at 50 percent, but recent weeks have seen increased volatility in the markets, particularly with record-breaking gold prices and sharp corrections in the stock market.
Deposit interest rates in banks have been on a downward trend, raising questions about how the CBRT decision will impact these rates. Will there be significant movements in the stock market? What direction will the dollar and gold take? Economist Hikmet Baydar shared insights with milliyet.com.tr, stating that market expectations suggest the CBRT is unlikely to make any changes to interest rates.
“When will the interest rate be reduced?” Baydar anticipates a potential interest rate cut towards the end of the year, possibly after October. However, he emphasized the importance of monthly inflation falling to around 1 percent and the need for convincing evidence that inflation will not rise. Failure to meet these criteria could postpone the expected interest rate cut until 2025.
On the impact of interest rate decisions on the markets, Baydar noted that without any surprise announcements, fluctuations are unlikely. He stated, “We expect neither a surprise decision nor a fluctuation” unless there is an unexpected discount, which could lead to temporary upward movements in the stock market, followed by sales to close positions.
With a focus on deposit interests, Baydar highlighted the possibility of a slight shift towards real estate investments, potentially affecting deposit rates. Despite liquidity abundance leading to interest rate declines, he anticipates the CBRT stepping in to withdraw excess liquidity and prevent further decreases in interest rates.
When it comes to gold, Baydar suggested that the real rise may begin with interest rate cuts, predicting fluctuations in both ounce and gram gold prices. As for the dollar, he anticipated the possibility of a weaker dollar compared to the euro and potential upward pressure against the Turkish lira, depending on factors such as annual inflation and foreign inflows.
Overall, the upcoming CBRT decision and its implications on interest rates, stock markets, gold prices, and the dollar have investors and analysts closely monitoring the situation, ready to adjust their strategies accordingly.
