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Central Bank of Turkey responds sharply to deteriorating inflation outlook
Following the stronger-than-expected inflation and recent FX pressures, the Central Bank of Turkey (CBT) hiked its policy rate by 500bp to 50% and announced a large set of macro-prudential measures and significant efforts to mop up excess TRY liquidity. These moves will likely further ease concerns about the CBT’s disinflation priority. The CBT hiked the policy rate (1-week repo rate) by 500bp to 50% at the March MPC meeting, while the prevailing market call, including our own, was for no change. The market expectation was mainly based on the view that the bank would prefer to see the impact of the additional ... (full story)