Goldman Sachs reveals when the CBRT will cut interest rates

US investment bank Goldman Sachs shared its forecasts regarding the Central Bank in its 2024 outlook report.

According to the report cited by Bloomberg HT, it is projected that the CBRT will continue interest rate hikes this year and that the policy rate will rise to 40 percent.

WILL DECLINE FROM 40 PERCENT TO 25 PERCENT

The bank included a forecast that interest rate cuts will begin in the third quarter of 2024, and that the interest rate will decline from 40 percent to 25 percent by the end of the year. It is also projected that inflation will fall to 35 percent by the end of the year.

In its last meeting, the CBRT raised the policy rate from 30 percent to 35 percent with a 500 basis point increase and signaled that the interest rate hike cycle would continue. 

GOLDMAN CHANGED ITS TURKEY CURRENT ACCOUNT DEFICIT EXPECTATION

The bank lowered its 2023 current account deficit/GDP forecast from 4.8 percent to 4.1 percent. For 2024, the bank stated that it holds a 1.8 percent expectation, which is below market consensus.

In its assessment, Goldman Sachs also stated that these forecasts include an expansion of the "primary income deficit, reflecting larger interest payments as a result of significantly higher interest rates."

The bank anticipates inflows into bonds in the coming period.

In its assessment, the bank stated, "We believe the current account will no longer pose a risk because we expect it to continue to improve going forward, and we believe the rise in interest rates will attract sufficient funding to cover it."

News Source: 12punto