CBRT to keep po l cy on hold

Dünya Executive - - REPORT - Econom st, Barclays C.

The sharp accelerati­on in headline inflation to a 15-year high of 24.5 percent has revived pressure on the Central Bank to tighten policy further. In response, the Central Bank of Turkey (CBRT) has jacked up rates by a cumulative 1600 basis points this year. The government announced a freeze in energy prices until the end of the year, and this week, Treasury and Finance Minister Albayrak unveiled a national campaign encouragin­g the private sector to cut prices by up to 10 percent. He also promised that the government would tighten controls and introduce fines on companies posting large price increases. The effectiven­ess of the campaign is unclear, especially if further monetary policy tightening were to be delayed. To be clear, we believe that the Central Bank is likely to keep policy on hold on October 26, opting for a wait-and-see approach until the next inflation print is published to assess the impact of the national pricecutti­ng campaign. (October 12)

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