BNY’s iFlow data show heightened risk aversion, with bond buying concentrated in G10 and Eurozone debt while EM sovereigns are sold. FX flows highlight outflows from INR and EUR against demand for CNY and ZAR.
Societe Generale expects the CBRT to keep the one-week repo rate at 37.0% and maintain a hawkish stance, with effective funding already pushed to 40% via the overnight lending window. The bank notes heavy FX reserve use and liquidity draining to support the Lira and tight conditions.
ING’s Frantisek Taborsky warns CEE currencies face downside as the Iran-related energy shock hits an import-dependent region. Higher Oil and gas prices and a stronger Dollar are expected to weigh on CEE FX and delay rate-cut plans.