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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- The CBRT is widely expected to keep its one-week repo rate unchanged at 50%, presumably having reached the peak of its hiking cycle back in March.
- Nevertheless, the Bank have made further adjustments to its macroprudential toolkit in order to manage liquidity and supplement its rate pauses.
- Among sell-side, some analysts see rate cuts commencing by year-end.
See our full preview, with a summary of sell-side analyst views, here:
Since the previous decision, inflation in June surprised to the downside, declining from 75.8% Y/Y to 71.60%, primarily due to base effects but nonetheless signalling the start of a disinflation cycle. The midpoint of the central bank’s year-end inflation forecast is 38% and sell-side are also broadly expecting the headline inflation figure to decline towards this level in H2, which should facilitate rate cuts towards the end of 2024.
Speaking in an interview to Reuters earlier this month, CBRT Governor Fatih Karahan said "We will maintain tightness and wait for data and expectations to get in line with our disinflation path. We think we still have some way to go in this regard." On inflation, Karahan noted that "We are seeing signs of demand rebalancing and its impact on prices” but added that “it is not healthy to draw conclusions from a single data point in this period of high volatility.”
Figure 1: Disinflation process started in June
Source: CBRT/TURKSTAT
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.