Change in foreign banks' interest rate cut forecasts for Turkey: They have pushed them to a later date

Foreign institutions have postponed their interest rate cut forecasts following the announcement of inflation data.

JP Morgan has shifted its expectation for a rate cut by the CBRT to 2025. As statements from banks worldwide continue to arrive, the Swiss-based UBS stated that a rate cut in November 2024 is still possible, but that this probability is decreasing.

Spanish bank BBVA has postponed its expectation for the first interest rate cut to December 2024.

British bank Barclays has emphasized that the date for interest rate cuts could be pushed even further into the future.

In a report it published, ING stated that the possibility of a rate cut in November has decreased.

Goldman Sachs has also postponed its expectation for a Central Bank of the Republic of Turkey (TCMB) interest rate cut from November 2024 to January 2025. Goldman economists, who had previously expected a 100 basis point rate cut in September and October 2024, had revised their forecast to November following the September 2024 Monetary Policy Committee (PPK) meeting.

Following the inflation data, Goldman Sachs, similar to JP Morgan, has projected that an interest rate cut may not occur within 2024. Additionally, it has raised its year-end inflation forecast for Turkey from 40 percent to 44 percent.

In an investor note published by Goldman Sachs, it was stated that "The lack of a slowdown in inflation and the continued erosion of household purchasing power may lead to a higher probability of a minimum wage increase in December and cause an increase in upside risks to inflation next year."

US-based Morgan Stanley made a similar assessment, raising its year-end inflation forecast from 42.4 percent to 43.5 percent following the inflation data, and stated that a potential interest rate cut in November is a weak possibility.