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Turkish central bank preparing for rate cuts in early 2019

The statement accompanying today’s decision by Turkey’s central bank to leave policy on hold suggests that the MPC is contemplating rate cuts. With inflation falling back and political pressure on the central bank to lower rates set to build ahead of March’s local elections, we now think it’s more likely than not that policy loosening will begin at the January meeting with a 50bp cut in the one-week repo rate.

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