What matters this morning

The annual inflation broke a new record of the last 20 months, according to yesterday’s data, which increased for the sixth consecutive months and reached 16.19% in March. Moreover, the core inflation which indicates the change in the costs of goods and services but does not include prices from the food and energy sectors due to their volatility, reached 16.88% and exceeded the headline inflation. This situation strengthened the expectations on interest increase at the Monetary Policy Committee’s meeting to be held on April 15.  

There is more… The annual inflation increase may not be limited to March and expected to break new records in April and May, according to analysts. As they say, the Central Bank’s second inflation report to be released on April 29 can be determinative in terms of future policies. The more optimistic news is that the annual inflation is predicted to end 2021 at 13% to 14% with a gradual decrease after May.

On the other hand, the Central Bank will release its expectation survey on April 9. The revisions following the recent developments can give clues about the course of CPI.

Looking at the money market, USD/TRY is appreciated at 8.13, while EUR/TRY is traded at 9.62. USD/TRY started the week at 8.20 and fell to 8.10 in parallel with decrease in U.S. bond yields.

The decline in U.S. bond yields also affected gold prices along with depreciation of USD in global markets. Spot gold exceeded USD 1,732 per ounce. On the other hand, brent crude reached USD 63 with over 1% increase, while U.S. crude oil increased by 1.5% and exceeded USD 59.


President Erdogan will receive European Commission President Ursula von der Leyen and President of the European Council Charles Michel to discuss relations (1.00 pm).

The Central Bank will release reel effective exchange rate (REER) data (2.30). The Consumer Price Index (CPI) based REER was announced as 69.69 points in February.

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