SocGen Shared Its USD/TL Forecast for the Second Time in a Week

SocGen shared the USD/TL forecast for the second time in a week. The institution revised its USD/TL forecast upwards.

After the Central Bank of the Republic of Turkey cut the policy rate from 18 percent to 16 percent, Societe Generale increased its 2021 USD/TL forecast to 10.30 from 9.80 and set its forecast for the end of 2022 to 12.5. In its report published on October 18, Societe Generale increased its year-end US dollar rate forecast from 9.25 to 9.80 and stated that it expected the CBRT to cut interest rates by 100 basis points in October. The bank, which expects the acceleration of dollarization in Turkey, noted that they expect a decrease or a pause in Turkish lira deposits in the coming months. Societe Generale expects the policy rate to decrease to 15 percent at the end of the year, while forecasting the 10-year Turkish bond rate to be 19 percent. Barclays also predicted that the CBRT will continue with front-loading discounts before stopping at 15 percent, but this will be done in one go at the November 18 meeting. Ercan Ergüzel from Barclays, said, "When we look at 2022, we estimate that interest rates will remain constant at 15 percent with upside risks." Barclays also predicted that inflation in Turkey would be 15.5 percent at the end of the year and confirmed its 2021 year-end USD/TL forecast as 9.70.