LONDON – Wall Street banks predicted on Monday more price pressures ahead for Turkey after the country reported annual inflation rates climbing to a 20-year high of 61.14% in March.
JPMorgan predicted Turkey’s annual inflation would hover in the 65-70% range until the very end of the year when it could fall to 44% due to strong base effects.
“The CBRT (Turkey central bank) has put all its emphasis on the FX-protected deposit scheme and is unlikely react to the CPI data no matter how strong it is,” said Yarkin Cebeci at JPMorgan in a note to clients.
Goldman Sachs forecast inflation to peak around 67% in May-June and remain above 65% for most of 2022 though end the year at 45%.
“We also see upside risks from commodity prices and the monetary policy stance which is not geared to fighting inflation,” Murat Unur at Goldman Sachs wrote in a note to clients. “Real rates in Turkey are now deeply in negative territory and are likely to fuel inflation further in the coming months.”
(Reporting by Karin Strohecker, editing by Jorgelina do Rosario)
