JPMorgan analysts Anelka’s report on Christovova and “Turkey: Market effects of the May 14 elections” highlighted expectations of policy change independent of the election result. In the statement, it was stated that regardless of the result, the necessity of macro regulation in the second half of 2023 is inevitable.
Institutional analysts stated that even if orthodox policies are returned in the post-election scenarios, they expect a depreciation in TL due to high volatility, and stated that 24-25 levels can be seen in .
“A real trend of appreciation in the lira can be seen in a scenario that will then return to orthodox macroeconomic policies,” the statement said. statement was included.
Analysts, who predict that the fair value in 5-10-year bond yields is 26-33 percent, “In the scenario of returning to the inflation-targeted orthodox policies, interest rates may peak with 25 percent. If the current macroeconomic policies continue, we do not expect much change in bond yields after the election, and there may be a moderate increase in the continuation.”
Expected rise in policy rate
Analysts, who expect the Central Bank to increase the policy rate from 8.5 percent to 30 percent in the third quarter of the year, in case of a return to orthodox policies, said, “The possibility of a rise in interest rates to 40 percent cannot be excluded. If there is not enough interest rate increase in the third quarter, macro imbalances may increase and require further rate hikes.
It was emphasized that the growth in Turkey may also decrease in 2023 with the effect of the global slowdown. An estimate of 2.5 percent growth in 2023 was shared.
In the previous days, Citi economists had stated in their post-election reports in Turkey that the Turkish Lira could appreciate by 12 percent in a year due to the relaxation of regulations and the recovery in the risk premium.