The Central Bank of Turkey kept interest rates on hold today and gave no hint that it will resort to more conventional measures to cool an economy that is showing clear signs of overheating. The key point, however, is that while policymakers at the Central Bank are coming under increasing fire in the markets, it is fiscal policy that will ultimately dictate whether or not Turkey achieves a soft landing – and the government has so far remained quiet on this front. Elsewhere, Czech rates were also left on hold today and we remain of the view that the pace of tightening priced into the market is too aggressive.