Along with the last rate hike, Turkey was one of the countries that have the highest real interest rates. However, the interest rate hike, which has been resisted for a long time, will have positive and negative effects on stock markets.
Positive:
1- This was a signal that supports the statements of the Central Bank that it will act more determined and independent in the fight against inflation.
2- High real interest rates may cause an increase in portfolio investments in the short term.
3- Restraining the exchange rate will provide an improvement on the inflation side. With the latest statement, the CBRT accepted that the exchange rate is the factor that has the greatest impact on inflation.
Negative:
1- High-interest rates will further deteriorate the balance sheets of companies and banks.
2- Both the credit contraction and the slowdown in economic growth will be the main factors in the deterioration of the balance sheets.
3- Rising interest will increase the alternative cost of investing in stock markets.

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