Monetary policy

Inflation expectations for the end of 2023 increased from 37.12 percent in May to 38.55 percent in June, the Central Bank's Survey of Market Participants showed on June 16.

The 12-month ahead expectations also rose from 29.8 percent to 30.65 percent.

The government is considering revising the medium-term program in September, Vice President Cevdet Yılmaz has said.

The revised program will provide a framework for fiscal and monetary policies and include structural reforms, Yılmaz said in an interview with private broadcaster CNN Türk.

In Washington they paused; in Frankfurt they hiked; and in Beijing, they cut.

Central bankers in three of the world's key economic regions have unveiled divergent monetary policies this week as they each contend with their own challenges.

The banking market is witnessing a trend of conversion of mortgage loans that were contracted with a floating interest rate into a long-term fixed interest rate (mainly five years), as the persistence of inflation at high levels continues to make borrowers nervous about the evolution of interest rates after the end of the freeze that banks have implemented.

Foreign investors and Türkiye watchers are keeping a close eye on the steps the new economic team will take in the period ahead.

There are expectations that portfolio inflows in to the country may increase depending on the messages sent out by those at the helm of the economy management.

The European Central Bank will almost certainly deliver another interest rate hike tomorrow, pressing ahead with its fight against inflation even as the eurozone slides into a recession.

Analysts predict that ECB policymakers will copy May's move and again raise borrowing costs by 25 basis points, taking the closely watched deposit rate to 3.5 percent.

The spread between interest rates on loans and deposits is decreasing significantly, mainly after the recent increases in interest rates on new term deposits by Greek banks, according to the Hellenic Bank Association (HBA).

Australia's central bank hiked interest rates to an 11-year high yesterday and warned that further rises may be on the horizon to get surging prices under control.

The Reserve Bank of Australia lifted the key rate 25 basis points to 4.1 percent, its highest level since May 2012, with governor Philip Lowe saying inflation had "passed its peak" but was still stubbornly high.

As widely expected, Türkiye's Central Bank has once again kept its policy rate - one-week repo auction rate- constant at 8.5 percent. 

Türkiye's Central Bank has decided to keep its policy rate -one-week repo auction rate- unchanged at 8.5 percent.