Deutsche Bank analysis on Central Bank of Turkey: Room for further interest rate hikes opened

Deutsche Bank strategists evaluated the appointment of Fatih Karahan as the President of the Central Bank following Hafize Gaye Erkan’s resignation, stating, “With the appointment of the new CBRT President, we see room for an additional 250 basis points, even 500 basis points of front-loaded tightening.”

The German banking giant Deutsche Bank assessed the change in leadership at the Central Bank of the Republic of Turkey (CBRT).

Deutsche Bank strategists stated, “With the appointment of the new CBRT President, we see room for an additional 250 basis points, even 500 basis points of front-loaded tightening.” The analysis indicated that the change in presidency and the rise in inflation had opened up room for further interest rate hikes.

According to a report, Deutsche Bank strategists, foreseeing increased inflationary pressures in the near term, stated, “With the appointment of the new CBRT President, we see room for an additional 250 basis points, even 500 basis points of front-loaded tightening. A 500 basis point hike has not been priced in yet.”

NO EXPECTATION OF INTEREST RATE CUTS

The bank expressed the view that it does not anticipate any interest rate cuts this year. It was predicted that markets would price in a gradual downward cycle for 2025.

Additionally, it was noted that the Central Bank may resort to additional macro-prudential measures.