Yet more IMF mambo jumbo.
Despite the downward bias of the reporting, neither the one-pager or the summary minutes reveals that measured rate cuts are on the way from the Central Bank. Sustaining the downward bias is not the same as cutting rates. In fact, market economists are a bit undecided on how much further the Bank will go. While the consensus view is another 25bp cut next month before the Bank stops for a while, there are those who expect as much as 75bp cut in the next couple of months. There is further uncertainty on how long the bank will stay put and when the rates will start rising again, although rates are seen about 100bp higher a year down the road.
It is a good idea to shift exports to developing markets as the crisis lingers on, but it is more easily said than done. Besides, this is a very gradual process, as EU (particularly Germany) is by far Turkey's leading market, and you can not implement such drastic changes overnight.
Despite the downward bias of the reporting, neither the one-pager or the summary minutes reveals that measured rate cuts are on the way from the Central Bank. Sustaining the downward bias is not the same as cutting rates. In fact, market economists are a bit undecided on how much further the Bank will go. While the consensus view is another 25bp cut next month before the Bank stops for a while, there are those who expect as much as 75bp cut in the next couple of months. There is further uncertainty on how long the bank will stay put and when the rates will start rising again, although rates are seen about 100bp higher a year down the road.
It is a good idea to shift exports to developing markets as the crisis lingers on, but it is more easily said than done. Besides, this is a very gradual process, as EU (particularly Germany) is by far Turkey's leading market, and you can not implement such drastic changes overnight.
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