Emerging Europe Data Response Turkey Consumer Prices (Sep.) Turkey’s headline inflation rate was unchanged for a third consecutive month at 11.8% y/y in September but we expect it to rise over the coming months. And with the lira still under pressure, the... 5th October 2020 · 3 mins read
Capital Daily We doubt rate hike will prevent further falls in the Turkish lira While the Turkish lira has rallied today following the central bank’s surprise decision to raise its policy rate, we think that it will fall back before long unless the central bank follows up today’s... 24th September 2020 · 6 mins read
Emerging Europe Economics Update CBRT clawing back credibility The Turkish central bank’s (CBRT’s) decision to hike its policy rates by 200bp today is a response to the recent lira weakness, and should help to restore the Bank’s battered credibility. The move... 24th September 2020 · 3 mins read
Emerging Europe Data Response Turkey Industrial Production & Retail Sales (Jul.) Turkish industrial production and retail sales posted a strong recovery in July as the continued easing of lockdown measures and rapid credit expansion boosted activity. The tightening of monetary... 14th September 2020 · 2 mins read
Emerging Europe Data Response Turkey Consumer Prices (Aug.) Turkish inflation was unchanged between July and August, at 11.8% y/y, but the lira rather than inflation is likely to determine the central bank’s next moves. If the lira’s recent stability proves... 3rd September 2020 · 3 mins read
Emerging Europe Economics Update Turkey: tourism and tighter policy to hinder recovery The 11% q/q drop in GDP in Turkey in Q2 was smaller than we had expected and we now forecast the economy to slump by 3% this year (previously 5.8%). But the recovery over the coming quarters will be... 1st September 2020 · 2 mins read
Emerging Europe Economics Update Turkey: bar for policy rate hikes is very high Turkey’s central bank kept its key policy interest rates on hold today and, while the accompanying statement acknowledged growing upside risks to inflation, it looks like that the focus will remain on... 20th August 2020 · 3 mins read
Emerging Europe Data Response Turkey Industrial Production & Retail Sales (Jun.) Turkish industrial production and retail sales continued to rebound strongly in June but even so it looks like the slump in GDP over Q2 as a whole is likely to have been in the region of 20% q/q or so... 14th August 2020 · 3 mins read
Emerging Markets Economics Update Why Turkey contagion risks are smaller than in 2018 Concerns are mounting that Turkey is on the brink of a fresh currency crisis which, were it to materialise, could trigger some turbulence in other EMs’ financial markets. But it’s unlikely to result... 13th August 2020 · 3 mins read
Emerging Europe Economics Update Turkey’s banks still the weak link Turkey’s banks are more vulnerable now to a sell-off in the lira and a tightening of external financing conditions than they were in the run-up to the 2018 currency crisis. 12th August 2020 · 3 mins read
Emerging Europe Economics Update Turkey’s FX reserves flashing red Turkey’s central bank (CBRT) has burned through its FX reserves to defend the lira this year, but the CBRT’s firepower is severely depleted and reserves are now so dangerously low that monetary... 11th August 2020 · 3 mins read
Emerging Europe Economics Update How will policymakers respond to the falling lira? If strains in Turkey’s balance of payments fail to ease, the central bank will probably tighten monetary conditions more aggressively within the interest rate “corridor”. But use of the corridor alone... 10th August 2020 · 3 mins read
Emerging Europe Economics Update Assessing the hit to Turkey’s current account position Turkey’s current account deficit has widened to levels not seen since 2018, which can partly be explained by a slump in tourism receipts. While this should start to reverse over the rest of this year... 6th August 2020 · 3 mins read
Emerging Europe Data Response Turkey Consumer Prices (Jul.) Turkish inflation eased by more than expected in July, to 11.8% y/y, but this is unlikely to prompt the central bank to restart its easing cycle. Indeed, with pressure on the lira building, the next... 4th August 2020 · 2 mins read
Emerging Europe Economics Update Further falls lie in store for Turkish lira Today’s depreciation of the Turkish lira marks the first significant departure from the de facto peg that has been in place over the past month and, if tensions with the EU continue to escalate... 28th July 2020 · 3 mins read
Emerging Europe Economics Update Turkey: rates on hold as inflation concerns grow Turkey’s central bank kept interest rates on hold today and it’s clear from the accompanying statement that inflation concerns are preventing further easing. We think that rates will now be left on... 23rd July 2020 · 3 mins read
