ISTANBUL: Turkey’s central bank is expected to hike several of its key interest rates when it meets to set policy next Tuesday after sharp falls by the lira to record lows, a Reuters poll showed on Friday. Half of the 18 economists surveyed expected the bank to raise its main one-week repo rate, currently at 8.0 per cent, by 50 basis points. Four expected a 100 bps hike, two a 25 bps hike, and three expected it to be left unchanged. All but two of the economists expected the bank to hike its overnight lending rate, currently at 8.5 per cent, by between 50-150 bps. One expected the lending rate to rise 25 bps, and one expected it to remain unchanged.
All but one of the economists also expected the bank to increase the rate at its late liquidity window, currently at 10 per cent, where it has been encouraging banks to source lira in a bid to tighten liquidity and support the currency. Estimates ranged between a hike of between 50-300 bps. Half expected the bank’s overnight borrowing rate of 7.25 per cent to remain unchanged.
