Daily Macro News

* We expect the January Current Account Balance to post a deficit of USD4.5bn, above the median estimate of USD3.3bn according to the survey conducted by ForInvest.  We would like to reiterate that we have recently revised our 2025 year-end current account deficit forecast to USD 22bn (1.5% of GDP) from USD 15bn (1% of GDP), based on the assumptions that: (i) the real appreciation of the Turkish lira will persist...
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*The Treasury will hold 2y fixed coupon and 4y TLREF-indexed bond auctions today. According to the three-month (Mar – May 25) domestic borrowing strategy, the Treasury has a total domestic redemption of TL124.7bn in March, while in return plans to borrow TL201.2bn throughout the month, via five auctions. After today’s double auctions, the Treasury will hold a 7y FRN bond auction on March 17th, and 3y CPI-indexed...
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* TURKSTAT will release January Industrial Production (IP) figures today @ 10:00 local time. Following the strong increase in December, we anticipate a slowdown in January's IP figures. Please note that the sequential IP (the seasonal and calendar adjusted monthly figure) surged by 5% m/m in December 2024, while the calendar adjusted IP soared by 7% y/y. Our expectation for a weaker January IP is primarily...
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* The CBT will release the results of the February Market Participants’ Expectations Survey today @ 10:00 local time. Following the CBT’s upward revision of its year-end inflation forecasts in the 1Q25 Inflation Report presentation, the February survey results indicated a rise in market participants’ expectations for 2025. The year-end inflation expectation, which stood at 27% in the January survey, increased to...
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* We expect the Monetary Policy Committee (MPC) to cut the policy rate further by 250bps to 42.5% at today’s meeting, in line with the market consensus according to the survey conducted by ForInvest. The decision will be announced at 14:00 local time. It is important to note that the retroactive reduction which was recently applied to a portion of the medical examination copayment increases resulted in a downward...
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* The CBT released the February CPI-based Real Effective Exchange Rate (REER) Index at 74.96, down from the previous month’s 75.3, indicating a monthly real depreciation of 0.5%. Thus, the Turkish lira has depreciated in real terms for the first time since August. Moreover, the real appreciation over the last three months has totaled...
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*The CBT will release February Real Effective Exchange Rate (REER) today @14:30 local time. Considering the inflation data and the average Basket/TRY change for February, we expect the REER to rise slightly to 75.5 in February from the previous month's 75.4, implying a limited appreciation of the Turkish lira. If the release aligns with our estimate, this would represent the lowest real appreciation of the...
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* The CBT, taking into account recent developments in foreign currency loans, has decided to support its tight monetary stance through changes in the loan growth-based reserve requirement practice. Accordingly, the monthly growth limit for foreign currency loans has been reduced from 1% to 0.5% and the scope of foreign currency loans exempted from the growth limit has been narrowed. Total loan growth continues to...
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