Societe Generale's October 22 interest rate forecast for the CBRT

Societe Generale expects the Central Bank of the Republic of Turkey to keep its policy rate constant at 37 percent at its meeting on October 22. This projection differs from the market consensus expectation that the rate will be lowered to 36 percent with a 100 basis point cut.

In its published interest rate report, Societe Generale announced that it expects the CBRT to make no changes to the policy rate at the October 22 meeting and leave the rate constant at the 37 percent level. This forecast by the institution differs from the market consensus, where economists predominantly expect the policy rate to be reduced to 36 percent with a 100 basis point cut.

The report emphasized that the main reason for this divergence is the stickiness in inflation expectations. It was stated that inflation expectations maintaining their high course despite the slowdown in economic growth and tightness in liquidity conditions could lead the CBRT to adopt a more cautious stance. Additionally, it was noted that while the loss of momentum in growth and the easing of liquidity tightness could support loosening in the future, no cut is expected at this meeting due to the gradual progress of the disinflation process.