Interest rate

The European Central Bank meets on Thursday, with markets eyeing any nudge towards an interest rate cut as inflation weakens.

The ECB, expected to hold rates at a record 4%, is navigating a tricky path between keeping rates high long enough to contain inflation while not cutting too late as price pressures ease quickly.

In February 2024, inflation in the Eurozone slowed down to 2.6% on an annual basis from 2.8% in January, but slightly more than anticipated, as preliminary data from Eurostat indicates.

Every month, the Consumer Price Index (CPI) increased by 0.6% in February compared to the previous month when it decreased by 0.4%.

The current economic policies will continue to be implemented after the upcoming elections, Treasury and Finance Minister Mehmet Şimşek has said.

Türkiye will hold local elections on March 31.

Two US Federal Reserve officials indicated Wednesday that the nation's central bank is on track to tackle inflation, but that it is still too soon to begin lowering interest rates.

In a recent announcement, the Bulgarian National Bank has confirmed that the base interest rate for February will stand at 3.79%, maintaining the status quo from January. This decision follows a marginal reduction of 0.01% made in December 2023.

The targets in the Medium-Term Program (MTP) announced by the government after the elections are realistic, says Alpaslan Çakar, president of the Banks Association of Türkiye, adding that there is a correlation between all the figures.

European Central Bank (ECB) policymakers are expected to keep interest rates steady on Jan. 25 and signal they are in no hurry to start slashing borrowing costs despite progress against inflation.

The Frankfurt institute is tipped to pause for the third meeting in a row following a historic run of hikes to tame runaway prices, leaving the benchmark deposit rate at 4 percent.

Türkiye's banks and other financial institutions will start applying inflation-adjusted accounting next year, the Banking Regulation and Supervision Agency (BDDK) has announced.

US investment bank Jefferies predicts a further increase in interest rates on time deposits in Greece for 2024, favoring a shift from ordinary savings accounts to time deposits.

To date, Greek banks have on average raised interest rates on deposits by just 15%, compared to a eurozone average of 20%, and based on estimates this rate will increase by 50% within 2024. 

In 2023, the BIST100 index remained below the performance of 2022 and inflation, but there is a premium of about 35 percent. The policy based on high-interest rates, which changed with the new economic management after the elections, mobilized alternative markets. Interest rates, foreign exchange and gold protected investors relatively from inflation compared to the stock market.