Citi: Limited Room for TCMB Rate Cuts

Citi economists stated that the Central Bank of the Republic of Turkey (TCMB) has limited room for maneuver in cutting interest rates. The report emphasized that the inflation outlook remains challenging, with core and services inflation staying elevated. Citi warned that the disinflation process could progress more slowly than the TCMB anticipates, which constrains expectations for rate cuts. The economists stressed that the stickiness in inflation dynamics necessitates a cautious stance in monetary policy. The report also noted that under current economic conditions, the TCMB should not rush to lower interest rates, as doing so risks a deterioration in inflation expectations. Citi highlighted the importance of the central bank following a data-driven approach. This is not investment advice.