Exporters’ eyes are on interest rate cuts | Turkish Economy News

Inflation, which increased by 0.3 percent in March, was recorded as 3.5 percent annually. Although the March data came slightly above expectations, it is estimated that the European Central Bank will relax the interest rates, which it kept constant in April, at the June meeting if there is no deterioration in the indicators.

FRANCE AND SPAIN WELCOME

In the Eurozone, inflation slowed down faster than expected, strengthening the possibility of lowering interest rates in June. France, Italy and Spain, which are among the leading economies in Europe, are open to interest rate cuts in parallel with the decrease in inflation, which averages 10 percent, to a reasonable level. The improvement in macroeconomic indicators in European Union member countries is expected to have a positive impact on export partner countries in the nearby geography, such as Turkey.

Many sectors in Turkey were negatively affected by the steps taken to cool the economy following rising interest rates in Turkey’s largest export market. Turkey, which conducts approximately 45 percent of its foreign trade with European countries, expects to sell more products depending on the increase in demand in the member countries of the union.

INCREASE INFLATION DISTURBED EXPECTATIONS

It seems difficult for the Central Bank of America to cut interest rates before the last quarter, in line with expectations, in light of the announced data. The Fed has narrowed the current money supply by 4 percent to reach its 2 percent inflation target. Growth-oriented US companies, unable to find cheap loans, had expected interest rates to ease before August. However, this expectation remained in the air with the announced March inflation data.