Kaiyuan Macro: The initial effects of the Turkish Central Bank's policy are beginning to show.

According to a report by Nicholas Farr, a macro analyst at Capital Economics, the Turkish economy is experiencing its first contraction in years, and the tightening monetary policy is beginning to show results in the country. The economic contraction in the third and second quarters of Turkey means that the country has entered a technical recession. Previously, the Central Bank of Turkey raised the interest rate to 50% between last year and early 2024. Farr said, ‘The tightening policy implemented by the Central Bank is helping to rebalance the economy.’ He added that policymakers can now consider lowering interest rates, despite the persistent strong inflation.