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Goldman Sachs Make No Changes to Rate Forecasts Following CBRT Leadership Change

TURKEY
  • Goldman Sachs say they see no reason to doubt that incoming Governor Fatih Karahan will pursue a similar path to the one chosen by his predecessor, and they therefore see no reason to change their forecasts.
  • Their base case is that rates are on hold till the end of Q2-24, when they expect sequential inflation to fall sharply and allow the Bank to cut rates without putting undue pressure on the TRY or undermining the disinflation process.
  • Until then, policy measures will be aimed at absorbing excess liquidity. Goldman Sachs say recent regulatory actions suggest that the CBRT is in no hurry to phase out the FX-protected scheme fully and see no reason to assume that the strategy will be affected by the change in leadership.

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