The year-end dollar forecast has changed. According to the latest statement from the Central Bank, the previously expected year-end exchange rate has been revised. The Central Bank’s March Expectations Survey shows that the anticipated foreign exchange rate for the end of 2020 — specifically the US dollar — increased compared with the previous survey period. Previously the year-end 2020 dollar rate was forecast at 6.45 TL; the March survey results raise that projection to 6.51 TL. At the same time, expectations for interest rates and inflation have eased.
The Central Bank of the Republic of Turkey has published a new year-end 2020 dollar forecast. The results of the Central Bank’s March Expectations Survey were released today. The end‑of‑2020 US dollar exchange rate expectation, which stood at 6.45 TL in the prior survey, has been revised to 6.51 TL in the latest release. Meanwhile, the 12‑month ahead exchange rate expectation in the same survey rose from 6.51 TL to 6.66 TL.
Dollar Revision Accompanied by Lower Growth, Interest Rate and Inflation Expectations
The revision to the dollar forecast comes alongside downward revisions to growth, interest rate and inflation expectations. Real GDP growth for 2020 was expected to be 3.5% in the previous survey; the current March results show a reduced forecast of 3.3%. Year‑end consumer inflation (CPI) was projected at 10.06% in the prior survey, and the March survey lowered that expectation to 9.98%. The 12‑month ahead CPI expectation also declined, from 9.61% to 9.51%.
The Central Bank’s forecast for the end‑of‑month one‑week repo auction rate has fallen from 11.02% to 10.33% in the current survey. The Central Bank’s Expectations Surveys collect responses from participants representing the real sector, the financial sector and professional forecasters.