Political risk recalibration. Political tensions have heightened following a court ruling sentencing Istanbul Mayor İmamoğlu to 1 year and 8 months in prison for allegedly threatening the Istanbul chief prosecutor. These developments have drawn attention to the intersection of legal and political processes in Türkiye. Depending on their trajectory, they could shape investor sentiment and influence the perception of institutional dynamics. However, much of the political uncertainty appears to be reflected in asset prices.
CBRT to restart its rate-cutting cycle. The Central Bank of the Republic of Türkiye (CBRT) will hold its next Monetary Policy Committee meeting on 24 July 2025. According to surveys, all market participants expect the rate-cutting cycle to resume, with forecasts centred around a 250-300bp cut from the current policy rate of 46%. This would follow the rate hike earlier this year in April and a hold decision in June, both of which were positioned as part of a cautious and data-dependent approach. The latest signals from policymakers suggest that the CBRT believes monetary tightness has reached its peak and that room for gradual easing is emerging as inflation decelerates.