CBT cut upper bound of interest rate corridor by 50 bp

• In line with the consensus forecast, CBT lowered the overnight lending rate from 10,5 percent to 10 percent.
• CBT declared that the decline in global volatility measures (VIX and MOVE) allowed CBT to cut overnight lending rate.
• CBT also stated that wide interest rate corridor (275 bp) is not needed any more. This means interest rate cuts will continue.
• CBT expects CPI will continue to decline in short term. On the other hand core CPI is not decreasing as expected. Core inflation makes CBT to be cautouis in cutting interest rates further.
• USD/TRY did not increased after interest rate decision. Because of radical interest rate speculations USD/TRY drop off 2,81 levels.
• Treasury yields also came down further after decision.