Morgan Stanley: Central Bank of Turkey will soar interest rate

Baku. 5 December.REPORT.AZ/ After the inflation figures were announced yesterday, Central Bank of the Republic of Turkey (CBRT) is expected to increase the interest rate by 0.75% in its meeting planned for December 14.

Report informs referring to the Bloomberg, analysts of US bank Morgan Stanley stated.

Inflation’s rate at 12.98%, the highest level in the last 14 years, put three different scenarios in the next meeting of the Central Bank. One of them is that CBRT will not make any change in the monetary policy and wait for the fall of inflation after softening the demand. According to the second scenario mainly focused by the Bank, daily financing and weekly repo rates, which are the other monetary instruments can be left stable by increasing the Late Liquidity Window (now 12.25%) by 0.75%

Third and the least realistic option is that Late Liquidity Window will be increased by 2-3%.

As inflation rate is predicted to fall in the short-term, real percentages in this scenario is expected to increase and Morgan Stanley considers this option less likely.

US Federal Reserve System (Fed) will hold its next meeting on December 12-13. Interest rate is expected to be increased by 0.25% in the meeting.