Deutsche Bank adapts to Türkiye’s inflation trends

Deutsche Bank adjusted its policy rate forecast, citing Türkiye’s inflation dynamics

Deutsche Bank revised its policy rate forecast due to Türkiye’s inflation dynamics. The bank predicted that the Central Bank of the Republic of Türkiye (CBRT) could increase interest rates from 45% to 50% at its March meeting. 

The German bank stated that a 500-basis-point increase in interest rates at the March meeting of the CBRT is highly probable. It updated its policy rate forecast over the worsening inflation trend in Türkiye.

According to Bloomberg HT, analysts led by Yigit Onay said, “Policies are moving in the right direction. Fitch’s latest credit rating increase reflects the return to orthodox policies. However, difficulties in the economy continue in the short term. Persistent inflationary pressures and a significant decrease in the bank’s net reserves are among these.

“There is also a decrease. The upcoming local elections create uncertainty. There is also concern that the depreciation of the TL will increase the demand for foreign exchange. In the long term, we expect the CBRT to remain on hold until the last quarter and the interest rate cuts to be gradual. Our year-end policy rate forecast is 45%,” he said.

Source: Newsroom

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