Citi, Deutsche Bank and HSBC's CBRT Interest Rate Predictions

Citi, Deutsche Bank, and HSBC October Inflation Assessments

Citi highlighted in its assessment that inflation in Turkey has slowed down in October, but inflationary pressures continue. The report stated, ‘In an environment of weak economic activity, rising inflation expectations create a complex scenario for the Central Bank. Decreasing growth and weak labor dynamics may complicate the CBRT's continuation of a restrictive stance.’

Policy Rate Forecasts

Citi forecasts that the policy rate will reach 38.50% by the end of the year. The CBRT had lowered the current interest rate to 39.50% during its October meeting.

Deutsche Bank's Expectation of a 100 Basis Point Cut

Deutsche Bank announced that it expects a 100 basis point interest rate cut in December. The report stated, ‘The October inflation figures stood at 2.55%. This was below market expectations.’ The annual inflation declined to 32.9% following the increase in September.

The institution noted that expecting an early easing cycle is challenging, adding, ‘The decrease in short-term political uncertainties could support gradual easing alongside pressures on the exchange rate.’

HSBC Continues with a 150 Basis Point Rate Cut

HSBC pointed out that October's inflation was slightly below expectations and predicted a 150 basis point cut in December. Stating that ‘Our inflation forecasts for 2025 and 2026 remain unchanged at 32% and 20%,’ they noted that the CBRT will consider the latest data as supportive for easing.