Page 20 - Turkey Outlook 2023
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The authority forecast end-2023 official inflation at 22% (upper
boundary: 27%).
The guidance was based on the assumption that the Turkish lira (TRY)
will not experience another crash. As of December 30, the USD/TRY
was up 0.6% to 18.72 from 18.6 on October 27.
If the USD/TRY remains stable, Turkey’s official inflation figures
will decline to the 30-40%s across 2023.
On January 26, a new quarterly inflation report and updated inflation
forecasts will be released.
On November 24, the central bank’s monetary policy committee (MPC)
cut its policy rate by another 150 bp to 9%.
The policy rate was now adequate and the rate-cutting cycle that
started in August, bringing 500 bp of cuts in all, was at an end, the
authority also said.
On December 22, the authority kept its policy rate constant at 9%.
The MPC holds rate-setting meetings each month between the 14th
and 26th days of the month.
Turkey’s policy rate essentially remains idle on the sidelines. The
government conducts its monetary policy via macroprudential measures
and non-capital controls. It does not need to cut the policy rate further.
President Erdogan demanded a single digit policy rate and, at 9%, he
got what he wanted.
20 Turkey Outlook 2023 www.intellinews.com
