Central bank meetings in Turkey and Hungary unlikely to bring change

Turkish and Hungarian CenBank rate meetings is scheduled today. Both central banks are likely to leave policy unchanged this month. A rate hike was expected from Turkey's central Bank this month had the Fed lifted off, but this is no longer on the cards. 

The Turkish meeting holds interest because of potential guidance on when monetary policy rationalisation will be completed by CBT and by when the market can expect a higher benchmark rate in Turkey, which CBT has signalled will be the final step of its new monetary policy framework, says Commerzbank. 

The CBT has been pushing up the weighted average cost of funding for banks towards 9% in preparation, which strengthens the view that the benchmark rate will settle in the c.9% region by end-2015, states Commerzbank. 

The Hungarian CB meeting, on the other hand, is unlikely to bring any new guidance on monetary policy or rates: inflation has turned down afresh around CEE and Hungarian monthly growth indicators have also weakened; but that said, 2015 will witness nearly 3% GDP growth, so at this stage, there is little prospect of the easing cycle being re-opened, added Commerzbank.