HSBC issues interest rate cut and dollar forecast for the Central Bank! They gave a date...
UK-based financial giant HSBC has updated its inflation, interest rate, and dollar forecasts for Turkey. The bank's report on Turkey also included the date when the Central Bank of the Republic of Turkey (TCMB) is expected to cut its policy rate.
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HSBC has published a report on the Turkish economy.
The report also included assessments and forecasts regarding interest rates, the dollar exchange rate, and the stock market.
According to an HSBC report, the pace of inflation decline in Turkey is expected to slow down in 2025. The inflation forecast for the end of 2024 was set at 58.6 percent, 31.9 percent for the end of 2025, and 19.8 percent for the end of 2026.
HSBC's inflation assessment included the following statements:
"Maintaining a restrictive monetary policy stance for an extended period may be necessary to deal with exceptionally high inflation and unanchored inflation expectations. Our base scenario anticipates a front-loaded easing cycle in 2025."
NEW FORECAST FOR THE DOLLAR
The bank, which predicted in May that the dollar would reach the 37-40 TL band by the end of the year, has updated its forecast regarding the dollar exchange rate.
HSBC has projected that the dollar/TL exchange rate will reach 36 lira by the end of this year and 40 lira by the end of 2025.
WHEN IS THE FIRST RATE CUT?
HSBC has projected that the Central Bank of the Republic of Turkey (TCMB) will not implement any interest rate cuts for the remainder of this year, with the first rate cut expected to take place in the first quarter of 2025.
Accordingly, the interest rate will be reduced by 1,350 basis points in the first half of next year and by 650 basis points in the second half, falling to 30 percent in December.
HSBC has announced its forecasts for the CBRT policy interest rate at 50.00 percent for the end of this year, 30.00 percent for the end of 2025, and 18.00 percent for the end of 2026.