20180118-法国巴黎银行-Turkey__No_pre-emptive_easing_9页_416kb

Summary of Document: Turkey: No Pre-emptive Easing

Core Content

The document discusses the Central Bank of the Republic of Turkey's (CBRT) recent monetary policy decision and provides analysis on the likelihood of future policy changes. It also includes contact information for BNP Paribas' Emerging Markets Strategy team, along with legal and compliance disclosures related to the document's content and distribution.

Key Information

• Monetary Policy Decision:
  The CBRT kept the late liquidity window (LLW) rate unchanged at 12.75% during its Monetary Policy Committee (MPC) meeting on 18 January. This decision aligns with market expectations and the analyst's forecast.

• Forward Guidance:
  The CBRT stated it will not ease monetary policy pre-emptively, even as headline inflation is expected to decline due to base effects. The central bank will wait for long-term inflation expectations to fall to around 7% before considering any easing.

• Inflation Outlook:
  Headline inflation is projected to decrease from 13% in November 2017 to approximately 10.5% in January and further to 10% in the following months. However, this decline is attributed to temporary factors, and the CBRT is focused on more sustainable improvements.

• Inflation Expectations:
  The CBRT's January survey showed that 12-month inflation expectations dropped by 6 basis points to 9.24%, while 24-month expectations fell by 24 basis points to 8.23%. These remain above the target of 5%, even considering the 2% uncertainty band.

• Policy Stance:
  The CBRT is maintaining a tight monetary policy stance, and the analyst believes that the threshold for tightening policy is high due to the expected increase in real interest rates as inflation declines.

Main Views

• The CBRT is not planning to ease monetary policy in the near term.
• The central bank is focused on long-term inflation expectations rather than short-term declines influenced by base effects.
• The real interest rate is expected to rise as inflation continues to fall, which could support the current tight monetary stance.
• The market is expected to remain stable in the short term with no immediate changes in the interest rate corridor.

Key Charts and Data

• Chart 1: Shows the CBRT's interest rate corridor, with the LLW rate at 12.75%.
• Chart 2: Depicts CPI inflation and BNP Paribas forecasts, highlighting the expected trend in inflation.

Strategy Contacts

The document lists key contacts for BNP Paribas' Emerging Markets Strategy team, including:

• Erkin Isik, CFA – FX & IR CEEMEA Strategist at Turk Ekonomi Bank A.S. (Istanbul)
• Wike Groenenberg – Head of Emerging Markets Research, CEEMEA & APAC at BNP Paribas London branch
• Marcelo Carvalho – Head of Emerging Markets Research, Latam at Banco BNP Paribas Brasil S.A. (Sao Paulo)
• Piotr Chwiejczak, Sai Ulluri – FX & IR CEEMEA Strategists at BNP Paribas London branch
• Mirza Baig, Dawn Kwa, Altaz Daga, Kun Shan, Tianhe Ji, Gabriel Gersztein, Samuel Castro, Gustavo Mendonca – Various strategy and research roles in different regions.

Legal and Compliance Disclosures

• The document is non-independent research and is considered a marketing communication under MiFID II.
• It is not investment research and should not be relied upon for making investment decisions.
• Confidentiality is emphasized; the document is for intended recipients only and may not be distributed without prior consent.
• No investment advice is provided, and all opinions and estimates are subject to change.
• The document may include hypothetical or back-tested performance data, which should not be used as a guide to future results.
• Conflict of interest disclosures are included, noting that BNPP may engage in transactions that could conflict with the views expressed.
• The document includes important disclosures for options, ETFs, and convertible securities, emphasizing the risks involved and the eligibility criteria for purchasing such instruments.

Regulatory Information

• The document is subject to various regulatory disclosures in different jurisdictions, including the U.S., UK, France, Germany, Belgium, and Italy.
• In the U.S., the report may be distributed only to qualified institutional buyers or non-U.S. persons under specific regulations.
• In the UK, it is communicated by BNPP London Branch, which is authorized and regulated by the ECB, ACPR, and FCA.
• In France, the report is produced and distributed by BNPP SA and BNPP Arbitrage, both under the supervision of the ECB and ACPR.
• In Germany, the report is distributed by BNPP Niederlassung Deutschland, a branch of BNPP SA, under limited supervision by BaFin.
• In Belgium, the report is distributed by BNPP Fortis SA/NV, which is authorized and supervised by the ECB, the National Bank of Belgium, and FSMA.
• In Ireland, the report is distributed by BNPP S.A., Dublin Branch, regulated in France by the ECB and ACPR.
• In Italy, the report is distributed by BNPP Succursale Italia, authorized and supervised by the ECB and ACPR, and regulated by the Autorité des Marchés Financiers.

Conclusion

The CBRT's decision to keep interest rates unchanged reflects its commitment to maintaining a tight monetary policy until inflation expectations stabilize and fall below the target level. The document serves as a strategic analysis and communication tool, with clear emphasis on the central bank's forward guidance and the market's expectations. It is important to note that the content is not investment advice and is subject to regulatory and legal disclosures.