Markets are focused on the Monetary Policy Committee meeting to be held on October 21. Economists expect a 100-150 basis points reduction, while survey results indicate a 50 basis points decrease in the policy rate. USD/TRY, which hovered around 8.30 levels in the beginning of September when the first interest rate cut message was given, has exceeded 9.33 now. TRY, which has nearly depreciated by 10% since the beginning of September, may carry the Consumer Price Index to over 20% alone, according to economists.
The France-based multinational investment bank and financial services company Societe Generale and German Commerzbank have estimated the Central Bank to lower the policy rate by 100 basis point. Apart from that, Societe Generale raised the country’s USD/TRY year-end estimation from 9.25 to 9.80.
German firms see Turkey not only as a large consumer market but as a hub which gives them access to a market with a population of 1.5 billion, according to Dr. Markus C. Slevogt, Head of the German Turkish Chamber of Industry and Commerce. “Turkey will have a new and important role in global supply chain activities and creating a more robust supply chain for European production hubs,” said Slevogt. “We consider the agriculture sector in Turkey as future trend,” he added. Bilateral foreign trade volume between Turkey and Germany hovers around USD 35bn.
DAILY AGENDA
The Turkish Statistical Institute (Turkstat) will release Agricultural Input Price Index for August (10.00 am).
The Ministry of Treasury and Finance will reissue 8-month (238 days) maturity zero coupon treasury bond and 7-year (2,520 days) maturity floating rate note as well as a 2-year maturity leasing certificate.
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