The head of the Turkish Banking Association expects to start cutting interest rates in Q4

Alpaslan Çakir, Chairman of the Turkish Banks Association, anticipates that the Turkish Central Bank will raise interest rates for the final time this week and commence a monetary easing cycle in the fourth quarter of this year.

Cakir, in comments made on Tuesday but embargoed until Wednesday, stated, “Rising interest rates are coming to an end around the world. I believe Turkey will follow the interest rate-cutting steps taken by major central banks, and I expect the interest rate-cutting cycle to begin in the fourth quarter.”

A Reuters poll indicates that the Turkish Central Bank is likely to raise interest rates by another 250 basis points to 45 percent following the monetary policy meeting on Thursday, marking the conclusion of the sharp monetary tightening cycle.

The central bank, under Governor Hafiza Ghaya, has already increased interest rates by 3,400 basis points since June, signaling a departure from the unconventional approach it had pursued for years.

Çakir, who also serves as the CEO of the major state-owned Ziraat Bank, anticipates that inflation will continue to rise until May before decreasing to approximately 40-45 percent by the end of the year. This projection is higher than the central bank’s end-of-year forecast of around 36 percent.