Deutsche Bank's dollar and interest rate forecast for Türkiye

Deutsche Bank, one of Germany's largest banks, pointed to July for an interest rate cut in Türkiye and raised its dollar forecast to 45 lira.

The Central Bank (CBRT) kept the policy rate unchanged at 46 percent today.

Deutsche Bank expects interest rates to be 37.5 percent by the end of the year.

The bank increased its dollar forecast from 43 lira to 45 lira.

Deutsche Bank Turkey economist Yiğit Onay explained the predictions in the CNBC-e live broadcast as follows:

* The CBRT decision came in line with our expectations. In fact, it shows that the CBRT feels somewhat comfortable in terms of the inflation outlook compared to the previous period, but has not abandoned its caution.

* Recent geopolitical developments have also highlighted the fact that supply-side shocks pose a risk to inflation. This has been the prominent factor in the CBRT maintaining its cautious stance.

* We can say that the guidance given to us by the Central Bank is that it acted patiently in June and that it may take action in reducing interest rates for July. Stability in the exchange rate will be important here.

* In an environment where there is a certain level of relief in the financial environment, a gradual interest rate cut can be expected in July. Our initial thought is that it will start with 250 basis points.

* Uncertainty is also high here. June inflation will arrive. Our expectation there is to see inflation around 1.5 percent.

* Food prices may cause some surprises, especially after the frost.

* The recent increase in oil prices is also reflected in pump prices. But as the Central Bank stated in its decision text, the main trend will be downward.

* We expect interest rates to gradually drop to 37.5 percent by the end of the year. Our estimates are above the market. The market expects a 36 percent year-end increase.