Central Bank surprised the markets! Here is the background of the interest rate cut

In December, the base effect may come into play, so that there may be a recession in inflation that can be felt at least on the figures. The realization of this decrease contributes to the normalization of inflation expectations. Of course, it is impossible to know for sure; however, it is possible that something close to these things was going through the minds of MPK members when they decided to cut interest rates. As can be seen, the effectiveness of the policy rate cut depends on the fact that some strong assumptions remain valid and certain scenarios become reality. One thing is certain right now, that the CBRT is trying to fight inflation by going the opposite direction of other central banks. As CBRT Chairman Şahap Kavcıoğlu stated at the last inflation report introductory meeting, time will tell which of these different monetary policy choices will turn out to be correct.

Source: A HABER by www.ahaber.com.tr.

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