Turkish Lira: Inflation expectations outpace CBRT forecasts – Commerzbank

FXStreet Insights Team FXStreet

Commerzbank’s Tatha Ghose revisits Turkish inflation dynamics, noting seasonally-adjusted price momentum above 2% m/m and warning that disinflation is unlikely. Market participants have raised year-end Consumer Price Index (CPI) expectations to 29.5% y/y, above Central Bank of the Republic of Türkiye's (CBRT) 28% forecast. Ghose argues CBRT repeatedly chases private forecasts, undermining credibility, while persistent high monthly inflation keeps the Turkish Lira (TRY) under pressure after breaking 48.10 against the US Dollar (USD).

CBT credibility and lira pressure

"Turkey’s seasonally-adjusted inflation momentum was still running faster than 2%m/m, which makes disinflation a highly unlikely outcome in the medium-term. The central bank’s (CBRT’s) latest market participants survey now adds another uncomfortable detail: market participants have lifted their year-end inflation forecast further to 29.5%y/y."

"The market has not moved down towards CBRT’s forecast – CBRT has moved towards the market. This is the usual pattern every year: CBRT begins with a good-looking year-end forecast, then progressively revises it higher as the horizon approaches and the original number becomes unbelievable."

"This matters for credibility. A central bank forecast is supposed to help anchor expectations, not merely capitulate with a lag."

"If private forecasters repeatedly move first, and CBRT only catches up at scheduled Inflation Report rounds, then the market will eventually treat inflation reports and mid-term plans as presentation documents rather than genuine forecasting tools."

"Meanwhile, the underlying data still offer no comfort: CBRT’s own seasonally-adjusted July estimate showed headline CPI rising by 2.3%m/ m, with services up by 2.9%m/m. Such a rate of fresh price increase remains incompatible with medium-term targets. The lira has recently broken through the 48.10 level against the dollar and will continue to be under pressure."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD stays weak below 1.3600 as USD bulls await Warsh's speech

GBP/USD is consolidating near the lower end of its weekly range, below the 1.3600 mark, during European trading hours on Thursday. The pair's downside, however, remains cushioned as traders await Fed Chair Warsh's speech on Friday for more cues about the US central bank's interest rate path before placing fresh directional bets.

EUR/USD holds range around 1.1650 as USD steadies

EUR/USD keeps its range around 1.1650 in the European session on Thursday. Hawkish ECB expectations support the pair as the US Dollar consolidates after the US PCE data-driven advance. The focus remains on Middle East developments and US Jobless Claims data.

Gold struggles to build on gains as traders await Fed Chair Warsh's speech for rate cues

Gold struggles to capitalize on modest Asian session gains on Thursday and remains below its highest level since May 14, touched earlier this week. Traders now seem hesitant to place aggressive directional bets and wait for US Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Symposium on Friday for cues on the future policy path. The outlook, in turn, will play a key role in influencing the US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

Ripple eases to $1.40, Solana hits $100, DOGE capped below $0.10

Ripple (XRP) and Dogecoin (DOGE) are facing downside pressure after double-digit gains last week, while Solana (SOL) extends its rally to $100. The technical outlook for XRP, SOL, and DOGE points to potential upside as the broader market sustains a risk-on sentiment.

Jackson Hole kicks off after upside PCE surprise

In China, industrial profits rose 17.6% y/y to CNY 4.58tn in the first seven months of 2026, slowing from an 18.7% increase in January-June. The moderation follows several months of strong profit growth around 20% y/y, supported by higher producer prices and solid manufacturing activity.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.