Macro and Politics

* TURKSTAT will release August inflation figures today at 10:00 local time. We expect monthly CPI inflation to come in at 2.1% in August, with annual inflation edging up slightly to 31.9% from 31.8% in July. The market median, meanwhile, points to a monthly increase of around 1.9–2.0% for August, placing the consensus slightly below our forecast. The temporary removal of the special consumption tax (SCT) on diesel through end-August is aimed at containing additional price pressures, and we expect the measure to help keep monthly CPI inflation around 2%. From September onwards, favorable base effects should become more supportive, bringing annual inflation closer to 30%, before the disinflation trend gains further traction in the final months of the year. We maintain our end-2026 inflation forecast at 28%, while continuing to see risks tilted to the upside.

* The CBT will release weekly foreign portfolio flows, money & banking statistics, and international reserves for the August 21– 28 period at 14:30 local time today. Based on our calculations using the CBT’s analytical balance sheet, we estimate that gross FX reserves increased only marginally, by USD80mn to USD188.5bn, while net FX reserves remained broadly unchanged at USD67.8bn during the week of August 21–28. We expect today’s official data to confirm a broadly stable reserve position, in line with our analytical balance sheet-based estimates.