Capital Economics: It Seems Unlikely That the Central Bank of the Republic of Turkey Will Cut Rates This Year

According to Nicholas Farr, an economist at Capital Economics, inflation in Turkey decreased less than expected in October, reducing hopes that the Central Bank would begin easing monetary policy this year. Inflation fell from 49.4% in September to 48.6%. While many analysts predict that the central bank will lower interest rates before the end of the year, they now believe this seems unlikely in light of the data. Farr stated, "We expect headline inflation to finish the year around 45%, significantly above the bank's latest forecast of 38%. The potential victory of Republican Donald Trump in the U.S. elections could reinforce this situation, leading to higher Treasury yields and a stronger dollar."