Created
: 2024.10.17
2024.10.17 20:02
While Turkey's central bank (CBT) removed sentences about additional tightening in its last monthly statement, and even introduced hints about monetary easing in the medium-term, the CB maintained its hawkish bias for the short-term, and is watchful of inflation developments. In this context, the September data were not encouraging at all, Commerzbank's FX analyst Tatha Ghose notes.
"Istanbul cost of living data had already warned us about an upside surprise, and the national CPI data then displayed re-acceleration in core prices. The September rate of change annualises to, still, nearly 50% underlying inflation rate. And, many commentators anyway assume that this national CPI measure understates true inflation. Given such an uncomfortable fundamental situation, there is no case for CBT to shift to a dovish stance or cut rates soon."
"To its credit, the economic policy team does not appear to be in any hurry with this, which has positively surprised markets. President Tayyip Erdogan's support has also proved to be a welcome surprise. Recent commentary confirms that CBT might resort to liquidity sterilisation or other quantitative measures, but will not change the base rate prematurely. Of course, in Turkey there are risks surrounding such a view, but for a change, the risks do not appear to be increasing."
"The lira has fluctuated more like a free exchange rate over the past couple of months - which probably reflects less intervention by policymakers and more integration with free world markets - which is positive for underlying bank balance sheets and CBT's FX reserves. Still, in our view, the medium-term trend of the lira exchange rate remains that of gradual depreciation: our end-2024 forecast for USD/TRY is 34.50."
Created
: 2024.10.17
Last updated
: 2024.10.17
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy