WOOD Flash – Turkey macro: CBT delivers an underwhelming hike
Yesterday (20 July), the Monetary Council raised the policy rate by 250bps, to 17.5%, which was in line with our view but, once again, fell short of consensus’ expectations. The statement reiterated the guidance on gradualism, but announced liquidity and credit tightening measures, which strengthens our view that a similarly gently paced tightening will ensue in the next few months. The government has adopted stronger budget consolidation measures than anticipated, in the form of tax increases, but these will worsen the inflation outlook materially and weigh on the Lira. This warrants a need for stronger policy tightening beyond our forecast of 30%; however, the odds of such an outcome are rather slim, in our view. Looking ahead, we expect the policy rate to rise to 30% by the year-end, and held flat in 2024E.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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