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October 3, 2019

Turkey: Inflation again surprised on the downside

Consumer prices increased by 0.99% mom in September lower than the median consensus (1.38%, Bloomberg and BBVA Research). Hence, annual inflation decreased to one digit level of 9.3% from 15% in August, the lowest level since January 2017. We expect annual inflation to get closer to 12.5% at the end of the year.

September 12, 2019

Turkey | The last bold cut… now time for fine tuning

The Central Bank of Turkey (CBRT) reduced the policy rate by 325 bps from 19.75% to 16.50%. The movement was higher than expected (Consensus 275 bps) but the reaction of financial markets to today´s decision was positive as the CBRT justified the movement with a faster than expected disinflation in the statement.

June 8, 2018

Turkey | CBRT surprised markets on the upside

The Central Bank (CBRT) hiked the one-week repo rate by 125 bps to 17.75%, clearly above market expectations (BBVA Research 50bps). With the decision, the CBRT reinforces its stance on inflation worries in the short term and takes a solid step to restore credibility against rapidly worsening inflation expectations.

June 4, 2018

Turkey | Inflation outlook deteriorated further in May

Consumer prices increased 1.62% (mom) in May, slightly higher than BBVA Research & Consensus estimate of 1.45%. Annual consumer inflation jumped to 12.15% from 10.85% on a broad-based worsening. We expect a limited hike (around 50bps) in the next CBRT meeting on June, 7 to strengthen its recent policy decisions and enhance …

May 8, 2018

Turkey | High core prices pose additional risks

Consumer prices increased 1.87% (mom) in April, even higher than our above consensus estimate (1.7% vs. 1.5%).Annual consumer inflation jumped to 10.85% from 10.23% with a more rapid pick-up in core prices than our expectation. We maintain our year-end inflation estimate at 10.5%, though exchange rate volatility and loose p…

April 26, 2018

Turkey | The CBRT raises rates by 75 bps

The Central Bank (CBRT) hiked its de-facto policy rate (late liquidity window, LLW) by 75 bps to 13.50%, in line with our expectation but slightly higher than the median market call, 50 bps. At two digits inflation, anti-inflationary policies should be at the forefront of economic strategies in a comprehensive way, includin…

April 4, 2018

Turkey | Sticky Inflation

Consumer inflation recorded 0.99% (mom) in March, in line with the market expectation (1%) but higher than ours (0.75%) on the discrepancy due to surprising food inflation.Recent exchange rate depreciation, upward risks on growth and high inertia (backward and forward looking) obviously create upside risks for our year end …

March 5, 2018

Turkey | Slightly higher than expected inflation

Consumer prices increased by 0.73% (mom) in February, higher than both our and market expectation (0.6% and 0.5%, respectively). Along with base effects, the overall impact helped annual CPI to fall to only 10.26% from 10.35%. The headline may exercise between 9.5-10% till June and worsen further during summer before fallin…