The economy world focuses on the Central Bank’s (CB) last inflation report for the year as well as the CB Governor Sahap Kavcioglu’s presentation and statements in this direction. The presentation includes the inflation and output gap forecast. The CB’s year-end inflation estimation currently stands at 14.1%. But it has been raised to 16.2% in the Medium-Term Economic Program. Moreover, upward revisions in inflation estimations draw attention in terms of deterioration in inflation dynamics. The Consumer Price Index will end the year at 17.63% according to the October results of the CB’s Survey of Market Participation. The latest 200-basis point interest rate cut and the recent inflation dynamics formed a basis also for some market players to revise their year-end forecasts towards 18-20%.
Since everyone wonders the motive behind the latest interest rate cut and the CB’s plans about fight against inflation, the question-and-answer part of the meeting will also be important. The details about the ‘limited room’ included in the Monetary Policy Committee (PPK) meeting’s statement are expected to be asked to the CB Governor.
Concerns over the CB’s monetary policy implementations and strengthening USD in the world continue to be the main factor paving the way for TRY to depreciate. Markets have also started to monitor whether the interest rate cuts of the public banks will be followed by the private sector or not and its possible effects on TRY. USD/TRY returned from 9.85, the highest level recorded so far, and balanced around 9.5 after the diplomatic tension regarding Osman Kavala eased. USD/TRY slightly rose to 9.56.
The Defense Ministry and the U.S. Department of Defense convened in Ankara to discuss F-35 dispute and financial issues, according to the Ministry of Defense. The parties have agreed to continue negotiations.
Moreover, the National Defense Minister Hulusi Akar and the U.S. Department of Defense Llyod James held a phone call and discussed bilateral and regional defense and security issues, according to the Turkish National Defense Ministry. The conversation also focused on steps towards establishing a positive agenda before the possible meeting between Turkish President Recep Tayyip Erdogan and the U.S President Joe Biden.
DAILY AGENDA
The Services Producer Price Index (S-PPI) fell by 2.32% in September, compared to the previous month, according to the Turkish Statistical Institute (TurkStat). S-PPI rose by 31.30% on an annual basis.
Tourism revenues jumped 181.1% to USD 11.3bn in the third quarter, compared to the same period of the previous year, according to TurkStat.
The marketable lignite production surged by by 26.5% to 6.9 million tons, while the marketable hard coal production decreased by 23.6% to 96,195 tons in August, compared to the previous month, according to Turkstat.
The Ministry of Culture and Tourism will release foreign tourist figures for September.
The Central Bank will release the Summary of the PPK meeting.
The Central Bank and the Banking Regulation and Supervision Agency (BDDK) will release weekly money and banking statistics (2.30 pm).
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