SocGen Raised Its USD/TL Forecast

SocGen raised its USD/TL forecast. The institution has decided to increase its USD/TL estimate by 0.55 TL.

While Societe Generale raised its USD/TL forecast for the end of 2021 from 9.25 to 9.80, stated that it expects the Central Bank of the Republic of Turkey (CBRT) to cut interest rates by 100 basis points in October. Stating that they expect the Turkish lira to continue to depreciate in the following quarters, SocGen economists stated that the concerns about the stability in the financial markets are likely to lead to a pause in the interest rate cut at the CBRT meeting to be held on Thursday. SocGen, which expects the 10-year Turkish Treasury bond interest rate to be at the level of 19 percent for the end of the year, predicts that the USD/TL rate will be 10.40 in the first quarter of 2022, and the rate will reach 11.60 in the third quarter of 2022. The bank's previous 2022 third quarter exchange rate forecast was at 10.00.

Bank of America Revised Its Forecast

Bank of America revised upwards its expectation for a 150 basis point rate cut by the end of the year, to 200 basis points, following the dismissals at the Central Bank of the Republic of Turkey Monetary Policy Committee. Bank of America economists, who stated that they expect a 50 basis point interest rate cut from the CBRT after the meeting to be held next week, noted that the depreciation of the Turkish lira and the increase in core inflation to 17 percent in August will prevent a larger interest rate cut.