JPMorgan’s CBRT expectation: Policy rate could fall to 35 percent with two rate cuts by year-end
JPMorgan economist Fatih Akçelik expects the CBRT to close the year with a 35 percent interest rate, following 100 basis point cuts in both October and December.
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JPMorgan has shared its year-end interest rate expectation regarding the Central Bank of the Republic of Turkey (CBRT). The bank's economist, Fatih Akçelik, stated that they expect the CBRT to resume one-week repo auctions next month.
According to Akçelik's assessment dated August 21, the CBRT is projected to implement 100 basis point cuts to the policy rate in both October and December. Under this scenario, the policy rate is expected to decline to the 35 percent level by the end of the year.
The note also included forecasts regarding August inflation. JPMorgan projects that monthly inflation will reach 1.9 percent due to the impact of fuel prices, while annual headline inflation is expected to be 31.6 percent.
Akçelik assessed that tight financial conditions will continue to exert pressure on household consumption. This outlook indicates that inflation trends and domestic demand conditions will be closely monitored regarding expectations for the interest rate path.