I am not talking about the Morgans in the recent comedy with Hugh Grant and Sarah Jessica Parker, but the investment bank’s forecast revisions.

Morgan Stanley significantly downgraded its global growth projections on Thursday, noting that the U.S. and Europe were hovering “dangerously close to recession”- although they underlined that this was not their base scenario.

Other institutions, as if on cue, were quick to follow: The other Morgan, the J.P. one, revised its U.S. growth expectations soon afterward, and my email inbox rapidly filled with reports from others, all with imaginative titles such as “lowering our forecast” and “slow growth ahead”.

I am still not sure if it was these reports or Slyvia Plath’s poems that made me gloomy as I was doing my Thursday afternoon reading at a Gloomsbury café in London. But the downward revisions are actually very good news for the Central Bank of Turkey.

For one thing, they show that the Bank was right on target with its dismal growth outlook earlier this month. You could argue that the Bank’s response of cutting rates was not the right one, and the deflation scenario emphasized by Gov. Erdem Başçı is still not the consensus view. But the Bank was, along with my blog host Nouriel Roubini, among the first to notice the rising risk of a double-dip recession in advanced economies.

This global picture has affected the monetary policy outlook in other emerging markets as well. The tightening bias has all but disappeared, so the Central Bank of Turkey does not look like such a maverick anymore.

Moreover, Başçı, seeing the confusion in the markets on the Bank’s policies, is giving communication top priority. He talked to yet another Turkish TV channel last Monday. I would have found his performance top-notch had he not spoken about the lira.

I think the governor is playing a dangerous game with statements like “the Central Bank has views on the currency, but no commitment”. If you are wondering, the view is that the lira is 5-10 percent undervalued. That may well be the case, but “verbal currency manipulation” could easily lead to “currency speculation” in a country with a chronic current account deficit and therefore in need of external financing.

Speaking of the current account deficit, while the governor might have addressed the confusion surrounding the Central Bank’s policies, markets still continue to worry about the deficit, especially since capital flows to emerging markets are prone to “sudden stops” in the present global environment.

Although the Bank has taken an interest in the current account deficit since it unveiled its unconventional policy mix at the end of last year, it has limited tools to address it. A weaker lira is a temporary fix, which could backfire if it appreciates the real exchange rate by creating inflation, and there is only so much that can be achieved by curbing credit growth.

The true solution to the current account deficit would be through the mysterious word “reforms”. Mysterious because it is the usual prescription to the deficit, but no one, including those who use it, actually knows what it means.

I will explain my own understanding of reforms next week.

Emre Deliveli is a freelance consultant and contributor to Roubini Global Economics. Follow his blog, the Kapalı Çarşı, at http://www.economonitor.com/emredeliveli/.

P.S. Next week is actually tomorrow!:) I guess the only upside of having posted this column so late is that you will not have forgotten about this one when you read the next one:)

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