Try: Rate cuts will resume today – Commerzbank

Expectations have intensified so that the Turkish Central Bank (CBT) resumes the cuts of interest rates today: with analysts forecasts for a cut between 250 bp and 350 bp (most wait 250 bp). This perspective was already evident during the latest rates meeting: the CBT held the rate without changes at that time, but made subtle changes in its language and communication that made it clear that the central bank was preparing to cut rates soon: the reference was eliminated to the possibility of a monetary tightening of the state Go ahead, says Tatha Ghose, FX Analyst of Commerzbank.

The lyre is likely to continue depreciating faster

“The justification that the CBT will repeat today in defense of the feat cuts is that inflation has been constantly moderated. We, for our part, do not find the recent inflation developments or the balance of too convincing payments: we dismiss apparent trends based on interannual prices changes; the increase of the IPC settled seasonally CBT inflation projection by the end of 2025. If one trusted more in the cost of living data of the Istanbul Chamber of Commerce (ITO) than in the official CPI, then inflation would be running even faster. “

“In addition, several fundamental factors are currently pro-inflationary, including the recent upward adjustment of wholesale natural gas rates by the state energy company, the highest oil price now (compared to April-Mayo), and a depreciation rate of the lyre of around 26%. Finally, but not least, there may have been some improvement in the capital entry recently, but that was a rebet March-April, and also driven by primary broadcast.

“Given these complexities, and despite the optical improvement in interannual inflation, we believe that the credibility of the policy frame requires a more cautious approach than clippings of aggressive and early rates.