Turkish MPC cuts rates, looks through dire inflation outlook

The decision by the Turkish MPC to cut its overnight lending rate by a further 25bp, to 8.5%, provides further evidence that the Council is paying scant regard to its inflation target and more attention to moves in the currency (which has strengthened). The Council’s relentlessly dovish stance suggests that further rate cuts are on the cards – we have now pencilled in another 50bp of cuts this year. Elsewhere, the Hungarian MPC looks almost certain to leave its policy interest rate on hold at 0.90% later today.