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Barclays forecasts the Central Bank of the Republic of Türkiye (CBRT) will cut interest rates by 250 basis points at its Sept. 11 meeting, despite growth and inflation figures exceeding expectations, as the institution predicts continued monetary easing policies.
The investment bank expects the Turkish central bank to maintain its monetary loosening plans despite the higher-than-anticipated economic data, according to the firm's assessment.
BBVA Research said core inflation indicators provide space for the central bank to implement interest rate reductions, following August inflation data that exceeded market expectations.
The institution maintained its year-end inflation forecast at 30%, emphasizing that seasonally adjusted core inflation (C) likely reached 1.7% in August—the lowest level since 2021.
"This slowdown in inflation could create room for lower-scale interest rate cuts, including at next week's Monetary Policy Committee meeting," BBVA Research stated.
The research firm noted that while no significant improvement is expected in the inflation outlook under its baseline scenario, recent softening in core indicators could pave the way for more cautious monetary policy steps.
BBVA Research highlighted the importance of seasonal adjustments in core inflation measurements, indicating the August figure represents a notable deceleration in underlying price pressures.
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