Commerzbank’s Tatha Ghose asserts that the upcoming Turkish CPI and PPI data, scheduled for release by Turkey’s statistics office on Good Friday, are largely obsolete due to the anticipated impact of higher energy prices in the coming months [1]. Ghose expects a strong monthly print for March, with market expectations pointing to a slight moderation in headline CPI year-on-year but an acceleration in core inflation [1]. Specifically, Istanbul’s CPI inflation eased slightly to 37.7% year-on-year in March, down from 37.9% in February, while continuing to rise by 3% month-on-month [1]. At the national level, Commerzbank anticipates a similar pattern, likely reflecting a strong increase of approximately 2.5% month-on-month [1]. However, Ghose notes that these figures may already be outdated, as media reports indicate significant rises in costs for essentials such as bread and transportation since the data was collected [1].
Ghose emphasizes that the landscape has shifted dramatically, with forward contracts meaning that the latest energy price increases may not be immediately reflected in the CPI data [1]. He suggests that the impact of permanently elevated energy costs could prove futile in terms of short-term inflation readings, and that external-shock inflation may be treated as transient by FX markets [1]. Despite the expected strong March CPI print, Ghose maintains that the Turkish Lira is likely to continue on a steady structural depreciation path, with near-term reactions shaped by geopolitical developments [1].
Market implications hinge on how the geopolitical situation evolves in the coming weeks, rather than the March CPI data itself [1]. Ghose’s analysis implies that the Lira’s depreciation is a structural trend, and that inflation data may have limited influence unless accompanied by changes in external factors such as energy prices or geopolitical events [1].
CONCLUSION
Commerzbank expects the Turkish Lira to continue its steady depreciation, regardless of the March CPI data, due to structural factors and higher energy prices. The market’s focus is likely to shift toward geopolitical developments rather than short-term inflation readings. Overall, the sentiment remains negative for the Lira, with inflation data seen as having limited market impact.