Turkey’s Inflation Math Is No Longer a Dealbreaker for Investors

Microsoft’s Xbox Is Planning More Cuts After Studio ClosingsAs Governor Fatih Karahan prepares to unveil the central bank ’s fresh outlook at a quarterly event in Ankara on Thursday, investor focus is instead on how monetary policy aligns with a goal that a top official calls “ambitious but attainable.” It envisions inflation almost halving to 36% by the end of the year, a view more optimistic than the predictions of all but one analyst surveyed by Bloomberg .

Almost a year into Turkey’s embrace of more conventional economics, an audience that awaits Karahan and his two deputies is in a more forgiving mood. Still, the event is a rare opportunity to grill policymakers over what’s next with inflation running faster than in Venezuela and rates at nearly minus 20% when adjusted for current prices.

“A central bank that has an unambitious target is an oxymoron,” Deputy Governor Cevdet Akcay said at the presentation of the last inflation report in February. The following month, policymakers surprised with a 500 basis-point hike that brought their key rate to 50%. “Domestic demand conditions remain strong, and are likely to limit the improvement in inflation,” Barclays Plc economists including Ercan Erguzel said in a report.“The central bank’s second inflation report for this year is likely to show a small upside revision to its forecasts — if any at all. We expect the central bank’s forecast to remain below 40% and maintain our 43% estimate for end-2024 — risks to our outlook are also tilted to the upside.

-- Cocoa and coffee have become intertwined this year, with extreme weather and shortages fueling rallies of both commodities that test the limits of traders.

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