Central Bank Rate Cut Expectations Following September Inflation
With annual inflation falling below 30 percent for the first time since November 2021, experts anticipate that the Central Bank will implement an interest rate cut.
Following the drop in consumer inflation in Turkey to below 30 percent on an annual basis in September, experts predict that the Central Bank of the Republic of Turkey may make an interest rate cut at its October meeting.
September Inflation Data Announced
According to data from the Turkish Statistical Institute, the Consumer Price Index increased by 1.84 percent on a monthly basis and 29.73 percent on an annual basis in September.
While annual inflation in domestic producer prices stood at 27.38 percent, annual inflation fell below 30 percent for the first time since November 2021.
Price Changes in Expenditure Groups
Examining the CPI main expenditure groups, the largest decrease in September compared to the previous month was recorded in the food and non-alcoholic beverages group with a rate of 0.2 percent.
During the same period, the highest price increase was calculated and drew attention in the education expenditure group with a rate of 14.19 percent.
Economists' Assessments on Rate Cuts
Economist Haluk Bürümcekçi stated that seasonally adjusted CPI indicators point to declines in all groups, including the headline figure.
Bürümcekçi expressed that a 100 basis point cut is the strongest option at the Monetary Policy Committee meeting on October 22 and that room for a 200 basis point cut has formed until the end of the year.
Kutay Gözgör's Year-End Rate Expectation
Kuveyt Türk Investment Research Director Kutay Gözgör emphasized that September inflation remaining below expectations supports the rate-cutting cycle.
Gözgör noted that they expect the policy rate to be lowered to 36 percent in October and maintained at the 35 percent level with total cuts by the end of the year.
Reflections on Economic Policies
Tuncay İnci, Chairman of the Board of Spectrum Audit, Consultancy, and Certified Public Accountancy Inc., made evaluations on the subject.
İnci stated that inflation dropping below the psychological threshold of 30 percent demonstrates that the government's stability-focused economic policies are beginning to yield results.