ISTANBUL: Turkish markets were steady on Monday with investors expecting the central bank to leave interest rates on hold on Wednesday and trading subdued by a national holiday in London.
A Reuters poll of 20 banks found 13 expected the central bank to leave its main weekly repo rate at 8.25 percent on Wednesday. Six predicted a 0.25 percent cut and one expected a cut of half a percent. None saw a change in the 12 percent overnight lending rate.
"In light of the deterioration in inflation expectations, we do not expect a change in interest rates this month," Odeabank said in a note. "That being said, current market pricing is implying a 25 bps rate cut," the note said. The benchmark 10-year government bond yield inched down to 9.40 percent from 9.41 percent on Friday.
The lira slipped just slightly against the dollar to 2.1793 by 0729 GMT from 2.1785 late on Friday. Prime minister and president-elect Tayyip Erdogan has long pushed for sharper cuts in interest rates but, earlier this month, the central bank said the inflation forecasts from its monthly survey had increased.
"We have long argued that the inflation outlook as well as Turkey's risks did not justify rate cuts. Unless political pressures turn out to be decisive, the MPC is likely to think the same way this time and keep policy rates unchanged," Deniz Cicek, economist at Finansbank, said in a note.
Istanbul's main share index rose 0.08 percent to 78,986.83 points, outperforming a 0.02 percent fall in the broader emerging markets index.
Outside Turkey's 100 biggest publicly traded companies, shares in dairy company Pinar Sut jumped 7.7 percent after Russian authorities said they had approved the import of its goods along with those of two other Turkish companies.
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