Fitch Ratings has stated that it does not expect an interest rate hike from the Central Bank of the Republic of Türkiye (TCMB), highlighting that the consistency of Türkiye’s economic policies will be a key factor in its upcoming July assessment.
In comments made during an event focused on the Türkiye economy and banking sector, Fitch Senior Director Erich Arispe Morales noted significant depletion in the central bank’s reserves but acknowledged improvements compared to 2023 data. “We estimate that TCMB reserves have declined by approximately $50 billion. However, there is notable improvement compared to 2023,” Morales said.
According to Bloomberg HT, Morales added, “We do not expect an interest rate hike from TCMB at this point. In our July review of Türkiye, we will take the consistency of economic policies into consideration.”
Fitch also forecasted that Türkiye’s economy will grow by 2.5% this year. Morales emphasized that fiscal consolidation is expected to give TCMB added momentum in the fight against inflation.
The agency projected the year-end average inflation rate in Türkiye at 34.31%.
Ahmet Kılınç, Director of Fitch Ratings for Turkish Banks, remarked that inflation in Türkiye is likely to surpass expectations. “When we look at Turkish banks, we are not changing our ratings. Credit growth remains strong. However, we may revise our outlook in the event of market volatility,” Kılınç noted.
Source: Foreks/ Prepared by: İlayda Gök