What matters this morning

The annual inflation saw 17.53% in June while the domestic producer price (D-PPI) index rose to 42.89% in this period. The 25-point difference between the inflation and the D-PPI has been read as a concerning development by the economy world.

The multi-national institutions have started to revise their year-end inflation forecasts for Turkey after the figures, which exceeded expectations, were released. The U.S.-based investment bank Goldman Sachs revised its forecast from 15.5% to 16% while the UK-based finance company Barclays raised the year-end Consumer Price Index (CPI) estimation from 13.8% to 14.8%.

Foreign institutions also made statements about the interest rate following the surprise inflation data. The U.S.-based investment bank and financial services Corporation Citigroup and the UK-based economic research and consultancy company Capital Economics emphasized that they don’t expect an interest rate cut by the Central Bank this year. On the other hand, Goldman Sachs said the Central Bank would slightly lower the interest rate in Q4 while Barclays downgraded its forecast on the bank’s interest rate cut expected in Q4 from 350 base points to 250 base points.

Looking at the money market, USD/TRY, which hovered around 8.65-8.75 yesterday, is traded at 8.65 this morning while EUR/TRY stands at 10.28.

Oil prices are on the rise as the cancellation of the OPEC+ meeting raised concerns over decrease in oil supply in a period when the oil demand recovers across the world. Brent crude rose by 0.73% to USD 77.72 per barrel.

Gold prices see the highest level in the last three weeks following the depreciation in USD. Spot gold surged by 0.85% to USD 1,807.


The increase in inflation stemmed from the food and core goods sub-categories, while the energy and services sub-categories declined on an annual basis in June, according to the Central Bank’s Monthly Price Development report.

The Central Bank will release the Real Effective Exchange Rate (REER) for June (2.30 pm). The Consumer Price Index based REER reached 60.55 points in May. 

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