Banking & Finance Turkey rate hike to 25% in June is ‘on the table’ By Reuters June 6, 2023 REUTERS/Mike Segar The US lender has been beefing up its global presence, with a goal of quadrupling the number of commercial clients as it enters new geographies An interest rate hike to 25 percent from the current 8.5 percent is on the cards for Turkey’s monetary policy committee’s upcoming meeting on June 22, “if not earlier,” JPMorgan economists said on Monday. “A policy rate hike to 25 percent, from the current level of 8.5 percent, is on the table for June 22 or earlier, along with forward guidance suggesting smaller rate hikes if needed,” the Wall Street bank said in an economic research note to clients. “We maintain our year-end policy rate forecast at 30 percent.” Years of unconventional policies such as cutting interest rates despite hot inflation have weighed on investor views of Turkey, as well as on voter sentiment ahead of President Tayyip Erdogan’s reelection late last month. But there has been guarded optimism for a shift in monetary policy since veteran policy maker Mehmet Simsek returned to head Turkey’s finance ministry. After winning a runoff election last weekend, Erdogan, who has ruled for more than two decades, began his new five-year term by calling on Turks to set aside differences and focus on the future. Erdogan’s economic programme since 2021 stresses monetary stimulus and targeted credit to boost economic growth, exports and investments, pressing the central bank into action and badly eroding its independence. As a result, annual inflation hit a 24-year peak beyond 85 percent last year before easing. The lira has lost more than 90 percent of his value in the last decade after a series of crashes, the worst in late 2021. It hit new all-time lows beyond 20 to the dollar after the May 28 vote.