Morgan Stanley announced TCMB's interest rate forecasts.

Important CBRT Predictions from Morgan Stanley Economists

Morgan Stanley economists expect the Central Bank of the Republic of Turkey (CBRT) to continue its tight monetary policy. The economists have predicted that the policy rate will gradually decrease to 27% by the end of 2026 and to 21% by the end of 2027.

Decisions Based on Meetings

Economists Georgi Deyanov and Andrea Masia foresee that the central bank will continue to show flexibility in its decision-making process. Accordingly, it is stated that the CBRT will have more options to respond to surprises in data, financial conditions, and risk perception.

Interest Rate Expectation for December

Morgan Stanley expects the CBRT to lower the policy rate by 100 basis points to 38.50% in December. The report states, "With an increase in the rate of decline in inflation in the first quarter, we see room for the Central Bank to raise the pace of interest rate cuts to 150 basis points on a meeting basis until the end of 2026. However, we anticipate a slowdown back to 100 basis points by the end of 2026."

Future Inflation Predictions

Morgan Stanley predicts that inflation in Turkey will reach 21% by the end of 2024 and 17% by 2027. According to the economists, the process of decline in inflation may slow down in 2027 with the increase in growth momentum; however, inflation is likely to remain in a general downward trend.