Turkish MPC steps up inflation fight

The Turkish MPC’s surprise move to tighten monetary policy further today via another hike in the late liquidity rate indicates that policymakers may have a greater resolve to tackle the country’s inflation problem than we (and most others) had anticipated. We think headline inflation is very close to peaking and further rate hikes are unlikely. However, today’s move suggests the MPC may ultimately be slower to reverse recent rate hikes than in the past.