CBRT’s Year-End USD/TL Forecast Was Raised

CBRT's year-end USD/TL forecast was raised. The USD/TL exchange rate estimate for the end of 2021 has been revised from 7.95 TL to 8.57 TL.

Central Bank of the Republic of Turkey (CBRT) announced the results of the April 2021 expectation survey. In the survey, year-end inflation, interest rate and exchange rate expectations increased compared to the previous month. The current year-end consumer inflation (CPI) expectation was 11.54 percent in the previous survey period, compared to 13.12 percent in this survey period. 12-month ahead CPI expectation was 10.47 percent in the previous survey period, while it was 11.26 percent in this survey period. The 24-month ahead CPI expectation was recorded as 9.18 percent and 9.55 percent, respectively, during the same survey periods.

Interest Expectations Increased

The current month-end overnight interest rate expectation in the BIST Repo and Reverse-Repo Market was 17.56 percent in the previous survey period, and was recorded as 19.03 percent in this survey period. CBRT Weighted Average Funding Cost is expected to be 19.00 percent in this survey period, while the current month-end expectation was 17.53 percent in the previous survey period. The CBRT's one-week repo auction interest rate expectation for the end of the current month came as 17.59 percent and 9.00 percent, respectively, during the same survey periods.

Year-End USD/TL Rate Expectations Increased

While the current year-end USD/TL exchange rate expectation was 7.95 TL in the previous survey period, it was revised to 8.57 TL in this survey period. The exchange rate expectation after 12 months was 8.20 TL in the previous survey period, while it was recorded as 8.78 TL in this survey period.