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New interest rate forecast for Turkey

Inflation exceeding expectations in August has led JPMorgan to re-evaluate its interest rate cut expectations for Turkey.

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New interest rate forecast for Turkey

According to data released by the Turkish Statistical Institute (TÜİK), the consumer price index (CPI) rose by 2.04 percent month-on-month and 32.95 percent year-on-year in August.

These high inflation figures have strengthened economists' expectations that the Central Bank will adopt a more cautious approach at the Monetary Policy Committee meeting in September.

ING economists stated that if the Central Bank decides to cut interest rates at the meeting to be held on September 11, it may remain at a limited level. Similarly, JPMorgan economists also predicted that the Central Bank of the Republic of Turkey might act more cautiously due to current political uncertainties and risks of dollarization.

JPMorgan Economist Fatih Akçelik stated that the bank had previously expected a 300 basis point interest rate cut in September, but this expectation has been revised down to 200 basis points. Additionally, it was reported that the year-end interest rate expectation has been updated to 37 percent.


News Source: 12punto

JPMorgan