What matters this morning

The first impact of deprecation in TRY hit both producers and consumers. The annual inflation has reached its highest level since March 2019 with 17.14%, while the domestic producer price index saw 35.17% on annual basis. Economists think that annual inflation can reach 18% in the coming days while the year-end inflation can see 14.5-15%, which is above the Central Bank’s forecast.

The pressure of producer prices on inflation will continue in Q2 and the core inflation data verifies the tendency of increase in inflation, according to Serhat Gurleyen, Director of Is Yatirim. “We estimate that the headline inflation will stand at 16.5-17% in summer, and that the increase will be observed only in Q4,” said Gurleyen.

The inflation is possible to surge to 18%, according to Tugrul Belli, veteran daily Dunya columnist. “The tightening expectation would emerge in the market when it happens. The year-end inflation can reach 14.5-15%,” said Belli. Economist Haluk Burumcekci also thinks that the course of inflation would continue at high levels and it would end the year at 14-15% at best.

Enver Erkan, Chief Economist of Tera Yatirim reminded that the range between producer and consumer inflation exceeded 18 points. “It’s impossible to talk about a sustainable decrease in inflation considering such an outlook. We don’t expect any change at the Monetary Policy Committee’s meeting. Our year-end inflation estimation is 14%,” said Erkan. 

Looking at today, foreign exchange (FX) rates started a stable day. USD/TRY appreciates at just above 8.28, while EUR/TRY is traded at 9.97.

Gold prices slightly decreased after it tested USD 1,797 with the impact of weak dollar and U.S. Treasury bond yields. Spot gold is traded at USD 1,786. On the other hand, brent crude stands at USD 67.45.


The Central Bank will release the Real Effective Exchange Rate (REER) for April (2.00 pm).

Minister of Energy and Natural Resources Fatih Donmez will meet European Bank for Reconstruction and Development (EBRD) President Odile Renaud-Basso and her delegate through video conference (3.30 pm).

Minister of Foreign Affairs Mevlut Cavusoglu and his Slovenian counterparty Anze Logar will hold a joint press conference after they will convey.

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