What matters this morning

The Central Bank Governor Sahap Kavcioglu will release the 3rd Inflation Report of the year. The year-end inflation is expected to be revised at the meeting to be held in a physical environment in the capital Ankara. The markets are looking forward to hear Kavcioglu’s messages about the course of inflation, projections and possible interest rate changes. Economy world’s year-end inflation expectation is over 15% while the Central Bank’s current estimation stands at 12.2%.

The Central Bank kept the interest rate steady at the Monetary Policy Committee meeting in June, but it said in the statement that the desired results of the tight monetary policy started to be observed. That’s why the bank seems to be ready to cut the interest rate at the first opportunity and messages both at the presentation and Q&A parts of the meeting will be important in this respect, according to Soner Kuru, Assistant General Manager of MARBAS Menkul Degerler.

No different messages will emerge from the discourse of the Governor at the meeting, while inflation forecasts can slightly be revised, according to daily DUNYA columnist and Vice Rector of Piri Reis University Erhan Aslanoglu. “The volatility in inflation will increase but the main path hasn’t changed will be the main emphasis of the meeting” he said.

Looking at the money market prior to the Central Bank’s meeting, USD/TRY, which has hovered around 8.55 almost for a month, fell to 8.49 while EUR/TRY is traded at 10.09.

Gold prices increase after Federal Reserve Chair Jerome Powell’s flexible messages about the monetary policy and ongoing weak course of USD. Spot gold surged by 0.68% to USD 1,819 per ounce. Oil prices also rose after crude oil stocks saw the lowest level since January 2020 in the U.S. Brent crude rose by 0.80% to USD 75.34 per ounce.


The Economic Confidence Index surged by 2.3% from 97.8 to 100.1 in July, compared to the previous month, according to the Turkish Statistical Institute (TurkStat).

43.2% of active enterprises operated in the services sector, while 36.6% operated in the trade sector in 2020, according to TurkStat. The services industry generated 37.9% of total employment while the share of the manufacturing industry was 28.9% last year.

The marketable lignite production increased by 7.9% to 5.9 million tons in May, compared to the previous month, according to TurkStat.

The Central Bank and the Banking Regulation and Supervision Agency (BDDK) will release weekly money and banking statistics (2.30 pm).

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