Macro and Politics

* The CBT Governor Karahan provided insights into the economic outlook yesterday. He acknowledged a temporary uptick in the overall inflation trend during the first quarter, while also noting a pronounced decline in service inflation following the easing of goods inflation. Karahan highlighted that the disinflationary process is ongoing, pointing out that cost pressures have been decelerating and inflation expectations are trending downward. He also emphasized that production indicators are signaling a recovery in economic activity, while domestic demand remains moderately resilient despite a generally subdued trend. Ahead of next week's MPC meeting, no new remarks were made by Karahan, in line with previous communications.

* The Treasury tapped the domestic market for TL102.8bn (including non-competitive sales) through yesterday’s 1y TLREF-indexed and 4y fixed coupon bond auctions, while also sold TL22.1bn at the direct sale of 2y lease certificate.  After this week’s auctions and direct sale, the Treasury will hold 3m G-bond and 9y fixed coupon bond auctions on April 14^th and 4y CPI-indexed bond auction as well as the direct sales of 1y USD-denominated bond & 1y USD-denominated lease certificate on April 15^th, finalizing its domestic borrowing program for April. According to three-month (April – June 2025) domestic borrowing program, the Treasury has a domestic redemption of TL293.3bn in April, while in return it plans to borrow TL329.5bn in total throughout the month via six auctions and three direct sales.