Deutsche Bank Sees Türkiye Rates at 30% by End-2027
The bank expects a December rate cut and says energy-price normalization could bring more easing in the first half of next year.
Key takeaways
- Deutsche Bank expects the TCMB to cut its policy rate by 100 basis points in December, to 35%.
- The bank forecasts a 30% policy rate and 25% inflation at the end of 2027.
Deutsche Bank expects Türkiye’s central bank to cut its policy rate by 100 basis points in December, bringing it to 35%. The bank forecasts a 30% rate and 25% inflation at the end of 2027.
The bank said higher inflation forecasts do not mean monetary policy will become less cautious. If energy prices normalize, favorable base effects could speed up the decline in annual inflation during the first half of 2027, allowing most of next year’s rate cuts to come in that period.
Deutsche Bank said risks to its rate outlook point toward slower easing. Uncertain energy prices, pressure on reserves, weaker portfolio inflows and stronger domestic demand for foreign currency could limit cuts.
The bank also warned that faster easing could revive domestic dollarization and add pressure on reserves. If economic weakness calls for looser financial conditions, it said the central bank could instead use targeted rules for specific credit areas.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
