Turkish MPC slowly taking a more hawkish line

The Turkish central bank left its official interest rates on hold today, but tweaks to its policy framework and to the accompanying statement suggest that the MPC is (slowly) taking a more hawkish line. Last week’s decision by the Fed to stand pat probably prevented bolder action today, although we don’t think the Turkish MPC will be able to hold out for much longer. Rate hikes look likely before year end. Elsewhere, while the National Bank of Hungary’s decision to leave its policy rate unchanged at 1.35% came as no surprise, the Council may strike a dovish note in the accompanying press release.