What matters this morning

The Central Bank did not surprise the expectations of the economy world and  increased the year-end inflation forecast by 2.8 points to 12.2% for this year, up from 9.4% in its previous report. The figure is expected to fluctuate between 10% and 14.4% through the end of this year, Sahap Kavcioglu, the bank’s governor, told at a virtual meeting held to release the bank’s second quarterly inflation report in 2021. Kavcioglu underlined that the upward revision was stemmed from an increase in assumptions for Turkish-lira-denominated import prices, output gap, and food inflation.

On the political side, the 5+1 informal conference on Cyprus issue was held under the leadership of the United Nations, with the attendance of two parties of the island and three guarantor countries, Turkey, Greece and the UK. Accordingly, Ankara will maintain its support for a two-state solution in Cyprus based on the sovereign equality of the Turkish and Greek sides on the island in all areas, the country’s vice president said.

Looking at the money market, USD/TRY, which fell to 8.13 with the messages of the Central Bank Governor Kavcioglu during the inflation report presentation, increased again to around 8.20 yesterday. USD/TRY is traded at 8.24 today while EUR/TRY continues its course below 10.00 and appreciates at 9.98-9.99.

Oil prices declined from its highest level of the last 6 weeks due to the concerns over more comprehensive isolation to limit the spread of the COVID-19 in India and Brazil. Accordingly, brent crude declines by 0.34% to USD 68.33. 

Gold prices also decline with the impact of yields of the U.S. Treasury bonds and Gross Domestic Product increase in the U.S. Spot gold dropped by 0.04% to USD 1,771.


Exports increased by 42.2% to USD 18.9bn and imports rose by 25.6% to USD 23.6bn in March, compared to the same month of the previous year, according to the Turkish Statistical Institute (TurkStat).

Tourism income dropped by 40.2% to USD 2.4bn in Q1 2021, according to TurkStat.

The Ministry of Culture and Tourism will announce the number of foreign visitors for March. The number of visitors dropped by 69.96% to 537,976 in February due to the adverse impact of the pandemic.

The Banking Regulation and Supervision Agency (BDDK) will release sectoral figures for the end of March. The banking sector made a net profit of TRY 15.22bn in the first quarter of 2020.

The Ministry of Treasury and Finance will release the conclusive and planned auction calendar for the May-July period.

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