Moody's to upgrade Türkiye. Moody’s will review Türkiye’s credit rating on 19 July. It currently rates Türkiye B3, which is two notches below the ratings assigned by the two other main rating agencies. Despite S&P and Fitch’s one-notch upgrades in recent months, Moody’s preferred to take its time and did not change Türkiye’s rating.
New incentives and possibly a new course for the TRY. The CBRT continues its moves to support the TRY by taking steps to accelerate the switch from FX to TRY. There is also some adjustment going on in terms of the value of TRY in the market. After two months of a very horizontal course vs. the USD, authorities allowed some depreciation in the TRY in June, which has continued in July.
Data to watch next week. Inflation expectations (July, previous 12-month CPI expectation 31.8%), consumer confidence (July, previous 78.3), real sector confidence (July, previous 102.8) and capacity utilisation (July, previous 76.3%). Additionally, the CBRT’s Monetary Policy Committee will convene on 23 July, however, as there has been virtually no change in expectations, market conditions and macro data, we will likely only see a lightly modified version of the last month’s statement, with the CBRT reiterating its hawkish messages.