Interest rate cut expectations in markets, foreign investments, and current account balance
Following the CBT's decision to keep interest rates steady, institutions expect cuts in the last quarter of the year, while foreign investors made net purchases in August.
Following the Central Bank of the Republic of Turkey's decision to keep interest rates steady, market experts predict that interest rate cuts could come back onto the agenda for the final quarter of the year. According to released data, foreign investors were on the net buying side in Borsa Istanbul in August.
Interest Rate Decision and Expectations
Following the Central Bank's decision to keep the weekly repo rate steady at 37%, reports from banks and brokerage houses were examined.
Institutions predict that interest rate cuts may resume in the final quarter of the year, driven by the decline in the underlying trend of inflation and weak domestic demand.
Economists' Forecasts
The vast majority of economists who participated in the survey conducted prior to the meeting had predicted that the interest rate would be kept steady.
According to evaluations, economists' year-end policy rate expectation is shaped within the band of 35 percent to 36 percent.
Risk Factors and Funding
High energy prices and geopolitical developments are cited as key risk factors regarding the timing of interest rate cuts.
It was stated that effective funding declined at the end of August and year-end CPI expectations are in the range of 28 percent to 30 percent.
Foreign Investor Movements
It was reported that foreign investors made net purchases in August within the scope of their transactions in Borsa Istanbul.
With this development, a noticeable increase was recorded in the total net foreign capital inflow during the first 8 months of the year.
Stock-Based Interest
Leading the stocks that foreign investors showed the most interest in during August were Tüpraş and Aselsan.
These companies were followed by stocks in different sectors such as Türk Altın, Erdemir, and Borusan Boru.
Current Account Balance Expectations
As a result of survey studies conducted with the participation of economists, a surplus is expected in the July current account balance.
It was announced to the public that the year-end current account deficit expectation has decreased somewhat and been revised downwards.