Turkey eyes more rate cuts: Analysts signal cautious easing ahead

Group 1 - The recent rate cut by the central bank in Turkey was 250 basis points, exceeding market expectations of 200 basis points, indicating a potential frontloading of cuts before the end of 2025 [2][4] - Inflation in Turkey is projected to remain high, with the central bank's interim target set at 24% and the government's midterm economic plan estimating year-end inflation at 28.5%, suggesting a challenging economic environment [3][4] - Despite the recent easing, real interest rates in Turkey remain high, with expectations that the policy rate by year-end will be in the mid-30s, around 36-37% [4][5][6] Group 2 - The central bank's cautious approach reflects concerns over potential demand for fixed income assets, as the Turkish lira has gained trust among domestic investors [5]