HSBC Maintains Expectation That TCMB Will Not Change Interest Rates Until 2025

Forex - Following the inflation data for October released by the Turkish Statistical Institute (TÜİK) yesterday, HSBC stated that they continue to predict that the Central Bank of the Republic of Turkey (TCMB) will not change interest rates until 2025. They emphasized that the TCMB could revise its forecasts upwards in the inflation report due on November 8.

In their assessment, HSBC remarked, "Regarding inflation momentum, although today’s data indicates a slight improvement in service inflation, this is completely balanced by the high core price pressures in the basic goods category. We do not believe the TCMB will feel comfortable initiating a easing cycle in this environment, and we continue to predict that it will not change interest rates until 2025."

HSBC pointed out that the TCMB's new inflation report will be released on November 8, stating, "Considering the recent results, we think some upward revisions may be possible. In the latest set of forecasts published by the Central Bank in August, inflation was projected at 38% for the end of 2024 and 14% for the end of 2025, within an uncertainty range of 34-42% and 7-21% respectively. In the government's medium-term program released at the beginning of September, year-end inflation forecasts were set at 41.5% and 17.5%. Our inflation forecasts for the end of 2024 and the end of 2025 remain unchanged at 44.5% and 27.6%."