The latest CBT survey shows that market participants expect inflation of 23.2% at the end of 2026; This compares to 23.4% a month ago. Inflation expectations look set to ease slightly as current inflation declines, but they appear to be stabilizing at around 23%, noted Tatha Ghose, foreign exchange market analyst at Commerzbank.
USD/TRY rises as inflation continues
“Forecasts into the future – say, for the next 24 months – are very unreliable; they follow a lazy pattern of eventually getting closer to the central bank’s target (although this never happens in practice). In other words, 23% is a more active forecast – closer to the final rate that the market expects at the present time. It is also the inflation rate that one can calculate on an annual basis from price changes on a monthly basis.”
“What this means is that new price increases every month – after all these quarters of high interest rates – are continuing at a pace inconsistent with the Central Bank of Tunisia’s medium-term objectives. This is what we have been warning about since last year: that it may be easy to get inflation down from 60% or 80% to 25% – because that peak of 60% or 80% was the result of several one-offs in the Covid era – but the path to ‘real’ inflation targeting remains as elusive as ever, The same survey also shows that the market expects interest rate cuts of 150 basis points this month and again in March.
“USD/TRY continues to rise steadily on a daily basis.”
