13.05.2025 10:54
The Netherlands-based bank ING, which is closely monitored in global financial circles, has shared its new inflation forecast for the Turkish economy. The institution predicts that if the current economic balances are maintained, inflation could remain below 30% by the end of the year. ING also projected the year-end expectation for the dollar/TL exchange rate to be 43.
ING Bank stated that the Turkish Lira (TL) offers a strong carry due to the steps taken by the Central Bank and will maintain its attractiveness. The bank also reminded that it continues to expect year-end inflation to remain below 30 percent.
The Central Bank had taken various measures to prevent the depreciation of the TL, including a 200 basis point increase in foreign currency reserve requirements, temporarily raising the delivery obligations for exporters from 25% to 35% until the end of July, and setting a monthly conversion target of 0.3 percentage points higher for banks regarding companies' TL deposit share. Banking giant ING interpreted the Central Bank's move as a step to both renew foreign currency reserves and encourage the transition from foreign currency to TL. The bank stated, "The trend of reserves, inflation rates, and the investment preferences of residents will be very important in determining the attractiveness of Turkish assets."
INFLATION FORECAST BELOW 30%
ING reported that, barring another foreign exchange shock, significant wage adjustments, unexpected increases in administered prices, or spikes in commodity prices for the remainder of the year, it continues to expect inflation to remain below 30%.
DOLLAR/TRY YEAR-END FORECAST AT 43 LIRA
Stating that the TL offers a strong carry further supported by the TCMB's interest rate hikes and will maintain its attractiveness, ING said, "However, in the event of some volatility, liquidity may tighten again, so we prefer the spot market over the futures market. We forecast the USD/TRY exchange rate at 39.44 for the end of the first half of the year and our year-end estimate at 43."