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Turkey’s central bank closes the door on easing cycle

Turkey’s central bank unexpectedly left interest rates on hold today and it’s difficult to see how economic conditions will change in such a way over the coming months to justify renewed easing. We now expect rates to be left on hold over the rest of this year and next. If anything, given Turkey’s large external debts and vulnerability to renewed financial market turbulence, the risks are skewed towards rate hikes.

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