JPMorgan expects Turkey’s central bank to increase interest rates to 25% from the current 8.5% at its scheduled June meeting. The bank also suggests that this rate hike may be accompanied by forward guidance indicating the possibility of smaller hikes in the future if necessary. This follows the recent appointment of Hafize Gaye Erkan as the central bank governor, with June 22 being her first policy meeting.
In a note to clients, Nicolaie Alexandru-Chidesciuc stated, “We maintain our year-end policy rate forecast at 30%, with risks on the upside.” The Wall Street bank predicts a recession in the second half of 2023 due to tightening credit conditions. Confirming this view, JPMorgan expects Turkey to experience a recession during this period.