Pressures on Turkish policymakers are building ahead of the local elections on 31st March as capital inflows have slowed and FX reserves are falling again. We doubt the central bank will hike interest rates next week, but we're growing more convinced that at least one further hike will be delivered in Q2. Elsewhere, while policymakers in Czechia continued to hold onto their hawkish rhetoric and pushed back against accelerating the pace of monetary easing next week, recent wage and inflation data support our view that interest rates are likely to be cut fairly aggressively over the course of this year.
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