CBT will likely maintain its cautious rhetoric

The Central Bank of Turkey (CBT) is expected to keep all policy rates unchanged at next week's MPC meeting. 

Inflation has accelerated to 7.9% y/y in April, while growth momentum remains weak (April PMI printed below 50, despite the rebound in IP in March). 

Governor Basci reiterated in the inflation report presentation the necessity for a cautious monetary policy, given the elevated food prices and uncertainty in global markets. Unless the disinflationary trend resurfaces, it is unlikely to shift to a dovish stance.