Goldman Sachs warns of $30 billion reserve loss in Turkey

Goldman Sachs has issued an analysis regarding the Central Bank of the Republic of Türkiye (TCMB), highlighting a $30 billion decrease in reserves over the last 12 months when adjusted for valuation effects. The bank noted that these reserve losses pose a fundamental risk to the current economic program, particularly if interest rates fall or election-related risks emerge.

Regarding monetary policy, Goldman Sachs expects the TCMB to maintain current interest rates, noting that future cuts will be evaluated on a meeting-by-meeting basis. While the bank agrees that domestic demand has been weak, its own economic indicators suggest a potential acceleration in demand, which could limit the deceleration of core inflation.

Other reports indicate the Central Bank has implemented a 1 percentage point interest rate cut. While such moves typically boost stock markets, recent market reactions have been tempered by external developments and concerns regarding the Wealth Fund. Analysts suggest that upcoming decisions will be heavily influenced by inflation trends, energy prices, and geopolitical tensions.