​CBRT stays put, fibs more, prays to Gods for a miracle

TURKEY - In Brief 26 May 2022 by Atilla Yesilada

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Just gonna stand there And watch me burn But that's alright Because I like The way it hurts Just gonna stand there And hear me cry But that's alright Because I love The way you lie I love the way you lie (The author prefers Rihanna cover) CBRT kept its policy rate at 14%, and didn’t announce any changes to its other policy tools. The MPC statement continued to ignore the threat of triple digit inflation with stone cold determination.The Bank may introduce additional macro-prudential measures later on, and appears ready (according to me) to invent new methods to distort the monetary transmission mechanism beyond repair. I suspect it has given up on trying to defend its de facto exchange rate peg, perhaps because it awaits instructions from the Palace as to how to proceed further. I think currency restrictions of some kind or other will be needed to prevent a re-run of the 21 December 2021 disaster. As I’m sure the readers have guessed by now, this Market Brief is penned by Atilla Yesilada, the Politics Dude, because my colleague Dr Ucer is in transit. He shall correct my errors of fact and judgment if and when needed. At MPC days I feel my creeping old age, which among many other things, manifests itself as impatience for tomfoolery.I don’t believe the MPC statement has any informational value, hence won’t bother dissecting it. For the diehard aficionadas, the English version is attached here. I don’t know how it started, but some market participants and Turkey’s large and highly emotional retail investor base expected a rate hike. I know, because I was asked by three different press sources about it. My answer was “Do you have any idea what kind of rate hike it would t...