Turkey: easing cycle near an end, hikes later this year

The Turkish central bank (CBRT) shrugged off rising inflation and lowered interest rates by another 50bp today, but the accompanying statement was a little more cautious and we think that the easing cycle is nearing an end. With inflation set to surprise the CBRT on the upside and the lira likely to fall sharply, we hold a strong non-consensus call that interest rates will be hiked later this year.
Jason Tuvey Senior Emerging Markets Economist
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