PPK day, expectations for interest rates and PMI data

LEVENT YILMAZ,  Thursday 12:21, 24 November 2022

Today, we will see the interest rate decision of the Central Bank Monetary Policy Committee (PPK). In today's article, I will take a look at the expectations on this subject and evaluate how the interest rate expectations for the end of the current year and for the upcoming period are shaped.


For the first time in a long time, we have a very high chance of accurately predicting the interest rate decision in a MPC meeting. Because the written guidance made in the previous meeting makes our work easier.

Looking at the following sentence in the resolution text of the October meeting, where MPC made a 150 basis point rate cut, we can predict that a 150 basis point rate cut will be made in today's meeting:

“The Board has decided to reduce the policy rate by 150 basis points. After a similar step to be taken in the upcoming meeting, the Board put on the agenda the end of the interest rate cut cycle.”


As the Monetary Policy Committee meeting approaches, we look at the surveys of some institutions to see how the expectations in the market are shaped. One of them is the BloombergHT Research Unit's survey. The median expectation of 19 institutions participating in the survey is that the policy rate will be reduced to 9% by making a 150 basis point cut at today's meeting.

Similarly, the expectation of those who participated in the survey of AA Finans is that the policy rate will be reduced to 9%. On the other hand, in the Market Participants Survey of the Central Bank, the current year-end interest rate expectation was shaped as 9%. This expectation points to results in line with the written guidance at the MPC's October meeting.

On the other hand, with the written guidance made in the last MPC, we can evaluate that the Central Bank will keep the policy rate constant for a while after the reduction to be made at today's meeting.


In many previous articles, I have explained what PMI data is and what it means. In this regard, I will briefly remind you today and share the graphic below with you. PMI data is a leading indicator that examines the purchasing tendencies of purchasing managers for goods and services. While this indicator is below 50 points, it is considered a contraction signal in the economy, while anything above 50 points indicates growth.

In the chart below, you can see the PMI data of the top 5 countries Türkiye exports to and Türkiye's own PMI data. Both have been on a downward trend for a while and both are currently below 50 points. Of course, the effects of the recent negativities in the global economy, including the energy crisis caused by the Russia-Ukraine War, are no small factor. However, reasons aside, it is necessary not to ignore the possible negative effects of these data moving below 50 points for a long time.

#Interest Rate
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