Morgan Stanley predicts that the Central Bank may continue with interest rate hikes after September. Analysts who have also revised Turkey’s year-end Consumer Price Index (CPI) forecast are expecting inflation to peak at 67% in May 2024.
Morgan Stanley, a US-based financial institution, stated that the likelihood of interest rate hikes in Turkey may increase after the new appointments to the Central Bank’s Monetary Policy Committee.
Morgan Stanley analysts, including Hande Küçük, expect the Central Bank to raise interest rates by 150 basis points to 19% this month and make a further 100 basis points increase in September.
According to Bloomberg, the analysts used the statement, “Despite the rising inflation, we expect the Central Bank to continue with gradual interest rate hikes.”
They have raised their year-end Consumer Price Index (CPI) forecast to 62% and expect inflation to peak at 67% in May 2024.
In the report, they also mentioned, “Considering the gradual pace of interest rate increases signaled by the Central Bank, potential additional adjustments in exchange rates and administered prices pose upside risks to the inflation outlook.”