BofA and HSBC Predict Timing of CBRT Rate Cut

The Central Bank of the Republic of Turkey's (CBRT) resumption of one-week repo auctions has brought foreign banks' interest rate expectations back into focus. Bank of America (BofA) and HSBC foresee continued rate cuts in the coming period, but they hold differing views on the timing of the initial move. BofA states that the CBRT will continue its rate-cutting cycle and that the first cut could come soon. The bank notes that improving inflation prospects and slowing economic activity are paving the way for the central bank to lower its policy rate. HSBC, on the other hand, predicts that rate cuts will continue but that the first step may be taken somewhat later. The bank argues that the CBRT will maintain its cautious stance and act with a data-driven approach, thus requiring a bit more patience before a cut. Both banks agree that the CBRT's monetary policy easing process will persist. However, this divergence on the timing of cuts plays a significant role in shaping market participants' expectations. Investors will continue to closely monitor the CBRT's decisions at upcoming meetings and inflation data. This is not investment advice.