Turkey CPI (Jul.)

The rise in Turkish inflation to a 15-year high of 15.8% y/y last month, coming alongside further lira weakness following the imposition of US sanctions, strengthens the case for interest rate hikes. While the central bank faces pressure from the government not to do so, we think policymakers will ultimately tighten monetary conditions further. We expect another 200bp of hikes in the one-week repo rate.