Morgan Stanley expects rate cut in July

US investment bank Morgan Stanley expects the Central Bank (CB) to cut interest rates by 250 basis points in July.

In the report titled "June inflation: Compatible with cautious discounting" written by Morgan Stanley Economist Hande Küçük, it was stated that core inflation was still higher than expected.

According to Bloomberg HT, the report in question said:

“We expect inflation to continue to decline; however, given the relatively flat inflation trend in June and the upcoming administered price adjustments, we expect the CBRT to begin rate cuts with a cautious 250 basis point cut in July.”

The report, which stated that the inflation data was "consistent with the expectation of a cautious reduction", said: "We continue to expect the decline in inflation to gain momentum in the summer months, with the slowdown in domestic demand, the decline in inflation expectations and the positive base effects, especially in July and August."

The bank's year-end inflation expectation is 29 percent.

“We expect the policy rate to fall to 36 percent by the end of the year with three 250 basis point reductions. We see the risks as balanced on both sides,” the statement said.