Turkey: Survey Results Show Market Support on CBRT Policies:)
This isn’t me; the title is actually from a report I received on the Central Bank of Turkey’s, or CBT’s, latest expectations survey.
The author’s bold claim is based on survey results showing that 12-month ahead inflation expectations have barely moved…
… and respondents seeing USDTRY at 1.76 one year from now.
As for inflation expectations, the fine print is that the Central Bank sees inflation at 5.2 percent at the end of last year. So much for market support:) And you can easily see in the second graph that FX expectations move together with the actual exchange rate.
If you are really wondering if markets are really showing support for CBT policies, I would refer you to a recent survey by the Turkish business channel Bloomberg HT that asks exactly that. I am hyperlinking the results in table and graphic format for your convenience. It seems markets are not that supportive of the CBT, after all:)
One really interesting result is the difference between foreign and domestic analysts. Foreigners are undoubtedly more critical of the Bank’s policies.I have no idea why, but my own observations, from reading reports and chatting with Turkey economists, are in line with the survey results as well. You see many more Turks than foreigners thinking the CBT’s policies are ingenious and deserve praise. Maybe, something is lost in translation 
…
Interestingly enough, the report I mention in this post was written by the Turkish economist of a foreign bank, but as they say, exceptions don’t break the rule:) Besides, I really don’t know the author of the report personally, but I have seen quite a few Turkey economists speak very differently of the Bank’s policies off-the-record than in their written reports- which is not that surprising, given Nomura’s recent fallout with the Central Bank, or rather Governor Basci. BTW, I am planning to write a column about the Bank’s and the government’s intolerance for dissidents like your friendly neighborhood economist, but I know that a prominent Turkish columnist is planning a similar column and I would not want to look like stealing his topic. So I will give it a rest for a while and then check with him is he is still planning to do it…
BTW, in the other important data release of last week, September Industrial Production came in much higher than expected, showing once more why I don’t try to read into data during the Ramadan month. That’s all I have to say for that, as I am starting get sleepy, but I am referring the interested reader to Citi’s take…
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