The Central Bank of the Republic of Turkey (CBRT) came out of today’s meeting with a 150 basis point rate cut decision. Quickly, all market players were certain that the interest rate would decrease in the middle of 100-150 basis points. For this reason, I can say that the market players faced a decision that they were largely prepared for.
After the decision, the answer to the question of why there was no movement in the foreign currency despite this decision of almost everyone is hidden at this point.
As I mentioned above, the market is very clear on what steps to take since the surprise in August. On the other hand, he also knows that the CBRT will not allow an unexpected movement in foreign currency, and will respond by selling foreign currency if necessary. In this situation, he is clear that there will be no interest rate cuts and the exchange rate attack that we frequently encountered in the last year.
That’s why, after the clear signals about the future of this decision, it has designed its utility tools accordingly. So the market benefit began to seek elsewhere.
Take a look at Borsa Istanbul, for example!
As the CBRT’s meeting approached, we saw significant upside movements in Borsa Istanbul, especially in banking shares. The main reason for this is exactly in the expectation I mentioned above. The expectation of an interest rate cut was combined with the expectation of banks to increase their stocks with this discount, and the prices went right up.
While market professionals are making this move, the small investor is of course trying to find a way with their own efforts. Small savers, whose savings have eroded under high inflation, seem to have chosen two paths.
The first cluster is stuck in the caravan in Borsa Istanbul. This is also a factor in the continued inflow of money there. Indeed, if we put aside the manipulation investigation initiated by the CMB as a result of what has happened in the past months, the small saver still thinks that the Stock Exchange is one of the tools that will protect himself best against inflation.
The second cluster is looking for opportunities in the crypto-asset markets. However, since the global resource inflow is also valuable in these markets, longer-term expectations seem to come to the fore.
What this decision tells us clearly shows that these two vehicles will be in the focus of the savings owners in the coming period.
The point to be considered is that while carrying out these processes, the increasing risk of calm in all world economies and the shocks that may arise from the increasing risks in the Turkish economy will be taken into account.
We should not forget the fact that we are facing an environment where the CBRT will continue the interest rate cut process in the next month and the monetary policy tool will become insignificant, especially in a period when the foreign exchange deficit in the economy increases.