According to Societe Generale analysts, the Central Bank of the Republic of Turkey (CBRT) will increase the policy rate to 31 percent at its September meeting, above expectations. Following this interest rate increase, another 600 basis point increase is expected in the fourth quarter, and with a 200 basis point increase in the first quarter of 2024, the interest rate may rise to 40 percent.
Among SocGen analysts Phoenix Kalen There are also experts such as and these economic experts predict that the Turkish lira will continue to lose value throughout the remaining year. Analysts’ year-end Dollar/TL exchange rate expectation is 30 at the level.
Analysts state that the Central Bank of the Republic of Turkey (CBRT) will most likely make tight interest rate increases, but they point out that real interest rates will be sharply negative due to the increase in inflation. They emphasize that while providing more flexibility in the financial environment could have a positive impact in the medium term, there are risks that could cause the lira to weaken in the short term.
In addition, analysts state that import demand remains strong and they expect the current account deficit to increase again in the winter months as the tourist season ends.